Top executives of Safaricom Ethiopia told Ethiopian law makers over a week ago that they were unhappy about ‘monopolistic’ practices of their competitor, Ethio Telecom; requesting the government to equalize access to open platforms.
- •According to an The Reporter, executives of the Kenya-affiliated telco lamented that Ethio Telecom users experienced higher tariffs and extra costs when making phone calls to subscribers of the Safaricom network.
- •This is in contrast to Safaricom’s fixed charge for all networks, a reality that makes it immensely harder for new customers to onboard their network.
- •The CEO of Safaricom Ethiopia, Wim Vanhelleputte, also raised concerns about Ethio Telecom’s monopolisation of the telecommunications networks and advocated for equal access for al market players.
“We want the country to benefit and to grow digital connectivity and financial inclusion; those are priorities for the country as a whole,” Vanhelleputte said.
“We are asking if there is an opportunity to get both networks to give equal access to the customer so that they can use both networks and not get excluded from calling our network,” the CEO added.
During the visit at the Safaricom’s headquarters in Addis Ababa, the law makers aligned to the Parliamentary Committee of Democracy Affairs were also requested to expedite inter-platform money transfer between M-Pesa and Ethio Telecom’s ‘Telebirr’. The executives said that the lack of interoperability between the financial platforms made it difficult to scale up digital financial inclusion in a country seeking to liberalize its economy. Safaricom itself reportedly pays taxes using Telebirr as opposed to M-Pesa, an issue that the telco wants resolved.
“Monopoly is a contradiction to liberalization. We have 32 banks; we have multiple fintech financial institutions; all of them should be able to offer digital payments. So we ask policymakers if we really want to accelerate digital Ethiopia, we should try to gate all the financial institutions to give them equal access to offer digital payments,” Vanhelleputte said.
The lawmakers promised to relay these prevailing concerns to the National Bank of Ethiopia (NBE). Ethiopia’s Ministry of Transport is set to allow its citizens to pay for fuel using mobile money platforms including M-Pesa.
Two Markets, Two Different Perspectives?
Safaricom itself has been accused of monopolising the Kenyan market, with its mobile money service (M-Pesa) controlling over 90% of the market share. This has prompted some lawmakers in Kenya to mull breaking up the service with its parent telco.
In 2015, Airtel Kenya petitioned the Communications Authority of Kenya to tame Safaricom’s proclivity to charge lower tariffs for calls within its network as opposed to calls to subscribers of other market players, the same complaint Safaricom is making against its competitor in Ethiopia. Equitel also accused Safaricom of hiking fees charged to its customers transferring money to M-Pesa without prior notice.
Safaricom entered the Ethiopian market in 2021 and has since then consolidated over 5% of the market share. During the group’s release of the half-year’s financial results, it was revealed that Safaricom’s profits declined by 17.7% due to the devaluation of the Birr this year. Despite revenues in the market growing by 12.9%, the forex losses accrued to the devalued currency considerably affected the group’s balance sheet.
