Safaricom is on the rise after securing Ethiopia’s mobile financial services license | Techy Kings

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Shares in Kenyan telecom operator Safaricom ( SCOM.NR ) rose more than 9 percent on Friday. after receiving a license for mobile financial services in Ethiopia, market participants said.

Ethiopia’s finance minister, Ahmed Shide, said on Thursday that his country had granted Safaricom a license in one of Africa’s biggest telecommunications markets as the company officially switched on the country’s first private network. read more

“It (the license) will advance the turnaround period by about two years,” said Lisa Kimathi, an investment analyst at Standard Investment Bank.

Safaricom, whose partners include South Africa’s Vodacom ( VODJ.J ) and Britain’s Vodafone ( VOD.L ), would have taken five years to break even without a mobile money license but could now take three years, said Kimathi.

Safaricom’s main rival, state-owned Ethio Telecom, launched a mobile phone-based financial service called Telebirr last year to spur growth by offering cashless transactions.

Telebirr now has millions of subscribers, but Kimathi said Safaricom’s financial services platform M-Pesa could take the lead.

in 2007 M-Pesa was one of the world’s first mobile transfer services. It has since evolved into a full-fledged financial service offering payment services, savings and credit in several African countries.

Safaricom executives said they also see huge opportunities for Internet access in Ethiopia.

Ethiopia’s telecommunications industry is seen as a big prize in Prime Minister Abiy Ahmed’s drive to liberalize the economy after the 2018 he took charge because it has a large population of 110 million.

But Abiy’s efforts to attract investment have been undermined by the war in the northern Tigray region, which has killed thousands and displaced millions.

Duncan Miriri reports; edited by Jason Neely, James Macharia Chege and Louise Heavens

Our Standards: The Thomson Reuters Trust Principles.

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