Regional media outlets are reporting that newly launched operator Safaricom Ethiopia has apparently claimed that price competition in the market will not be part of its strategy to win customers from state-owned operator Ethio Telecom.
In fact the new arrival has said it plans to keep its prices for voice and data within the ranges of Ethio Telecom, the company’s only competitor and, until Safaricom’s arrival, the only operator in Ethiopia.
The Chief Executive of parent company Safaricom, Peter Ndegwa, has been quoted as saying (at a conference call with analysts and investors): “From a pricing perspective, our pricing strategy is generally to be either in line or just slightly at a premium, but not to go for any price competition.”
The East African news service reports that Ethio Telecom slashed mobile data tariffs by up to one-third and launched mobile money services as it prepared for Safaricom’s entry. However, it also suggests that aggressive marketing and quality of service rather than pricing will drive Safaricom Ethiopia’s strategy. That said, the company did invest in special promotional offers for its launch.
It seems at the moment that Safaricom is making reasonable progress with rollout and take-up in this country that is home to over 122 million people. As we reported at the time, Safaricom Ethiopia customer numbers passed the one million mark in November last year.
But it soon won’t be the only competition for Ethiotel – if government plans, reported last week, to invite a third operator to join the market go ahead.