Safaricom is expected to revise down its bid for an operating licence in Ethiopia following the revelation that mobile money offerings will be the exclusive preserve of local financial institutions.
According to Business Daily, the Kenyan firm has disclosed that being unable to deliver its hugely successful M-Pesa service to Ethiopia’s 50 million mobile subscribers would significantly diminish its interest in the market, and that accordingly it would bid less for an operating licence.
While Safaricom has not publicly stated how much it would have bid on an Ethiopian licence, recent commends from the operator’s CEO Peter Ndegwa demonstrate that mobile money would have been a major pillar of its strategy, to the extent that being unable to offer M-Pesa would greatly damage its profitability in the market and substantially increase the time it would take to achieve return on investment.
Safaricom has applied for an Ethiopian operating licence as part of a consortium with its parent firms Vodafone and Vodacom. Former Safaricom CFO and current Vodafone Business CFO Sateesh Kamath noted that the bid would only be increased if a mobile money licence were available.