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Targeting a commercial launch later this quarter, Safaricom Ethiopia is deploying their first prefabricated data centre in Addis Ababa
In May last year, the Ethiopian regulator announced that a Safricom-led consortium, then named the Global Partnership for Ethiopia, had won one of two available licences to offer commercial telecoms services in the country.
The special purpose acquisition company, now known as Safaricom Ethiopia, is majority owned by Safaricom (55.7%), who is joined by Sumimoto (27.2%), CDC Group (10.9%), and Vodacom (6.2%).
The successful $850 million bid marked the end of one of the world’s last remaining telecoms monopolies. At the time, analysts were unanimous that the Ethiopian market represented an enormous opportunity for telcos, with a large, young population and a huge potential for digital growth, though many noted the ongoing civil conflict in the Tigray region as a major challenge for any new players.
Speaking on an investor call back in December, Safaricom CEO Peter Ndegwa said the “opportunities outweigh the risks and the uncertainties”, suggested that “telecoms market liberalisation has been unquestionably positive and of value for countries across the world”.
Now, Safaricom Ethiopia is beginning to prepare in earnest for its commercial launch, with a LinkedIn post announcing that the company had invested $100 million in its first data centre in the Ethiopian capital, Addis Ababa. The prefabricated data centre was reportedly built in China over a number of weeks, before being transported to the capital via sea.
With long-term plans for nationwide mobile coverage, this data centre is just the beginning, with many more required to provide quality service.
“We need a number of data centres across Ethiopia to be able to cover the whole territory,” explained Safaricom’s chief technology officer Pedro Rabacal.
This year, the company will reportedly invest $300 million into Ethiopia, with additional data centres across Ethiopia expected to be rolled out, beginning with Adama and then Dira Dawa.
Currently, the company is planning to launch commercial services in March this year, noting back in December last year that the company rollout is on track to meet this deadline.
Ultimately, Safaricom Ethiopia has aspirations of generating, directly and indirectly, a combined 1.5 million jobs over the next decade. They estimate that the business will break even by its fourth year of operation and will require up to $2 billion in capital investment over the coming five years.
For now, Safaricom remains the only new entrant to Ethiopia, despite the fact that the Ethiopian Communications Authority (ECA) initially offered two. In the first tender process, in which Safaricom won their licence, South Africa’s MTN bid $650 million for the remaining licence, but this was rejected by the regulator as being too low.
Since then, the ECA had been planning to relaunch a second tender process for the unsold licence, but said in December that the process had been shelved until “a more convenient time in future”, likely as a result of the ongoing civil war.
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