Safaricom, a telecom company, has mandated the closure of its locations in the Amhara region of Ethiopia as a result of the declaration of a state of emergency.
As the fight between government troops and Fana rebels got worse, an emergency order had to be given.
It is planned that the state of emergency will last for six months. This means that it might take Safaricom a while to get back to work in that area. Even though it wasn’t said, users in that area might have trouble getting network service in the meantime.
The Chairman of Safaricom’s Ethiopian operation, Michael Joseph, had something to say about the situation. He said, “As you know, there is a state of emergency today, so we can’t go to the Amhara area and had to shut down our sites there. All of these are problems we have to solve.”
He also said that the market in the country was tough. Given what was going on, he added that the security of the country was more important than other things. After all, it’s hard to work well in a place where things keep changing.
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Amhara’s conflict: why?
After a fierce two-year war in the country’s Tigray region, which caused a lot of trouble in the Amhara region, the war is over. While the Tigray war was going on, rebels from Amhara joined in.
When the Ethiopian government said in April that it would pull its troops out of Amhara, the trouble started. Amhara nationalists who protested the ruling said that it could make the area vulnerable to attacks from outside.
Even though Safaricom didn’t say how many sites it would close, Joseph said that this would have a big effect on the telco’s plans to grow in that market. The company has 1,272 sites in Ethiopia that serve 22 towns. 875 of them were built by the carrier, and the other 397 are colocated.
It wants to have 3,000 places by the end of 2024, which is one of its goals for growth. Safaricom has 2.1 million 90-day users, and there are plans to grow that number to 10 million by 2024.
It’s important to note that Safaricom hasn’t had the best of times in Ethiopia since it started doing business there last year. It made a loss of Sh22.1 billion in March.
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Safaricom’s M-Pesa launch in Ethiopia remains its priority.
Even though there are problems now, Safaricom has said that it is still on track to make M-Pesa work in Ethiopia. Remember that the company got a license for mobile money operations in May of this year? The deal cost the telecom company $84 million.
The effects of M-Pesa on Kenya’s mobile money market can’t be overstated. Many analysts see the service as a monopoly because it has the lion’s share of the market. Even though there are other options like Airtel Money, M-Pesa is still a big force.
There is no set date for its launch in Ethiopia, but it will be interesting to see how it competes with Telebirr, which has government support. Until recently, Telebirr was the only one in that category.