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Safaricom sees Ethiopia deal opening gateway to Africa.

Kenya’s largest mobile phone operator, Safaricom is betting its expansion on the Ethiopian newly privatized telecom market, after the Ethiopian government announced, for the first time, privatization plans of its state monopoly Ethio Telecom and the sale of two new telecom licenses later this year.

Ethiopia, with a population of over 100 million is the second largest populated country after Nigeria in Africa, and abound with opportunities as the country opens up. Safaricom believes its mobile money platform, M-Pesa, could help transform Ethiopia’s economy as it done with Kenya through increase in financial inclusion.

As of last month, however, Ethiopian officials have stated that there will be no room for foreign mobile money companies to operate in the country putting Safaricom’s plans to set foot in Ethiopia in jeopardy. The only alternative, it seems, is for Safaricom to partner up with the local Ethio Telecom which is set to be privatized in the near future. All these decisions, however, are put on hold until the presidential poll scheduled for August 29.

If Safaricom’s plan to introduce M-Pesa to Ethiopia succeeds then it would be a game changer for Ethiopians who currently have virtually no access to digital banking. If Ethiopia’s government decision stands, however, it will be a lost opportunity for international players who will be left out of a fast growing and untapped market.

Regardless of who ends up carving a piece of the pie, a similar system to M-Pesa taking root in the waking East African giant will have ground-breaking benefits to the country’s economy.

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