Safaricom invests initial KES 67 bln in Ethiopian venture

News Wireless Ethiopia 15 NOV 2021
Safaricom invests initial KES 67 bln in Ethiopian venture

Kenyan operator Safaricom is investing an initial KES 67 billion in Ethiopia for its new telecommunications partnership, The Nation reported. The amount is Safaricom’s contribution to the start-up costs and operating licence, for which the consortium paid USD 850 million. The consortium will spend more on infrastructure and other costs to operationalise the business.

Safaricom CEO Phillip Ndegwa said they expect capital expenditure of between USD 1.5 billion and USD 2 billion over the next five years to meet the licence coverage obligations. Safaricom says it will finance the big-ticket investments through its own funds and loans from local banks and development finance institutions. Safaricom has already borrowed KES 43 billion to fund a portion of the Ethiopian investment. The consortium pledged to invest a total of USD 8 billion over ten years, including the cost of building telecoms infrastructure.

Details of the Ethiopian investment were made as Safaricom published results for its half year ended 30 September, which saw net income rise 12.1 percent, helped by revenue growth as the company reinstated charges on M-Pesa transactions of less than KES 1,000.

Safaricom is the majority shareholder in the Ethiopian business at 55.7 percent. 

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