Safaricom closes shop in Ethiopia’s Amhara region following state of emergency

Following the declaration of a state of emergency in Ethiopia’s Amhara region, telecom company Safaricom has ordered the closure of its sites in the area.  The emergency order became necessary as the battle between government troops and Fana rebels continued to heighten. 

The state of emergency is scheduled to run for six months. This implies that it may take a while for Safaricom to restart operations in that area. While it wasn’t stated, customers in that region could experience poor network delivery in the meantime.

Michael Joseph the Chairman of Safaricom’s Ethiopia commented on the issue. He said, “Today as you know there is a state of emergency and we cannot go to the Amhara region and had to shut our sites down there. All these are challenges that we have to deal with.”

He further remarked that the country was a tough market. Given the current events, he added that the country’s stability came first before other interests. After all, it’s difficult to operate efficiently in an unstable environment.

The tension in Amhara follows the end of a bitter 2-year-old war that plagued the country’s Tigray region. Interestingly, the Tigray conflict attracted rebels from Amhara while it lasted. 

The tensions began when the Ethiopian government announced in April that it would recall forces in Amhara. According to Amhara nationalists who protested the decision, that move could expose the region to external aggression.

While Safaricom did not state the exact number of sites it would shut down, Joseph claimed that the closure would greatly impact the telco’s expansion plans in that market. The telco currently has 1,272 sites that serve 22 cities in Ethiopia. Of that number, 875 were built by the telco while 397 are collocated. 

Among its expansion goals is to increase the number of sites to 3,000 by the end of 2024. Regarding customer base, Safaricom has 2.1 million 90-day users with plans to reach 10 million by 2024 underway. 

It’s worth noting that Safaricom’s operations in Ethiopia haven’t had the best of times since its inception last year. In March, it registered a loss of Sh22.1 billion. 

Read also: Kenya’s Safaricom posts 22.2% decline in profit despite huge revenue growth

Safaricom remains focused on launching M-Pesa in Ethiopia 

Despite the current challenges, Safaricom has said it remains on track to make M-Pesa operable in Ethiopia. Recall that the company secured a license for mobile money operations in May this year. The deal cost the telco $84 million. 

M-Pesa’s impact on Kenya’s mobile money segment can’t be overstated. Many analysts view the service’s presence as a monopoly given that it enjoys the lion’s share of the market. Despite the availability of rivals like Airtel Money, M-Pesa is still a major force. 

While there’s no set date for its launch in Ethiopia, it’ll be interesting to see how it tackles state-backed Telebirr. Until recently, Telebirr was the sole player in that segment.