Kenyan telecom provider Safaricom has announced that it expects the bidding price for entry into the Ethiopian telecom market to reduce after the nation announced that it will not allow foreign financial institutions to provide mobile banking services.
This provision means that Safaricom will not be able to implement its own mobile banking service, M-PESA. Before the prohibition, the company had projected that its interests would have been significantly enhanced had it been allowed to provide its full range of services to the 50 million phone subscribers in the country.
According to CEO Peter Ndegwa, a license that does not include a mobile banking license will significantly reduce the profitability of the investment while, at the same time, lengthening the time period it would take to recoup the investment.
As of now, however, the company has not disclosed a specific amount for how much it is willing to bid or how much it expects the investment to increase its annual revenue, terming it as sensitive competition information.
In related news, the Ethiopian Communications Authority (ECA) has confirmed that it has received an expression of interest from 12 telecom companies including Etisalat, Snail Mobile, MTN, and Saudi Telecom Company.