The Kenyan telecoms giant Safaricom announced on Thursday that it had signed a deal to provide a mobile money transfer service in Ethiopia, making it the first private telecoms operator in Africa's second most populous country.
Safaricom's entry into Ethiopia ends the monopoly of state-owned Ethio Telecom in the tightly controlled country of more than 110 million people.
Safaricom has launched its network and services in the capital Addis Ababa, following successful trials in 10 other cities, the Kenyan telecoms giant said in a statement.
The Ethiopian government announced last year its intention to end the state monopoly in the telecommunications sector, a key element of Prime Minister Abiy Ahmed's economic reform programme.
Safaricom's network will offer 4G data, voice and SMS services between Safaricom Ethiopia and Ethio Telecom customers while "the rollout of the national network will continue to reach an additional 14 cities by April 2023," the statement said.
Safaricom then announced that it had obtained a licence to operate a mobile money transfer service in Ethiopia, similar to its M-Pesa service launched in Kenya where it has become indispensable.
The deal is "very important. It was part of the business plan," Safaricom Ethiopia CEO Anwar Soussa told AFP at the company's launch ceremony, adding that the service could take two to three months to roll out.
The deals were announced as Kenya's new president, William Ruto, visited Ethiopia and held talks with Mr Abiy.
Listed on the Nairobi Stock Exchange, Safaricom is one of the largest companies in East Africa, its success fuelled by M-Pesa, launched in 2007.
Safaricom is 35% owned by the Kenyan government and 40% by South Africa's Vodacom, with the remaining shares listed on the stock exchange.
In 2021, as part of plans to reorganise the telecommunications sector, Ethiopia launched a tender to award two licences to private telecommunications operators.
One licence was awarded to a consortium led by Safaricom, which offered $850 million and promised to invest $8.5 million over 10 years. Ethiopia has also started the process of selling a 40% stake in Ethio Telecom, but plans were put on hold earlier this year.