Safaricom Ethiopia, a consortium-backed telecom giant, has embarked on an ambitious journey in a market historically hogged by the state-owned Ethio telecom. With a substantial investment of 1.6 billion dollars, the company is positioning itself as a major player, aiming to break even within four years of its inception. This timeline reflects the significant startup costs and competitive dynamics in the sector.

The company entered the Ethiopian market after paying the federal government an 850 million dollars fee for the operating license and 600 million dollars in network infrastructure. The latest addition to this substantial spending is the 150 million dollars paid to obtain an M-Pesa permit, signalling Safaricom's entry into Ethiopia's emerging digital payment space.

Company officials attributed the journey into financial services to the company's broader vision of becoming an adaptable player in the evolving digital economy.

"We're still going to invest much more," said CEO Wim Vanhelleputte, addressing questions from the media last week, his first appearance after taking the helm from Anwar Soussa two months ago.

During the half-year performance report at the company headquarters in Bole Towers, on Africa Avenue (Bole Road), he revealed plans to grow Safaricom's network infrastructure.

Vanhelleputte believes his company is not only investing in infrastructure but also forging critical partnerships. It has entered into deals with 15 commercial banks, in its bid to integrate itself deeply into the financial ecosystem. This move could be significant given the considerable size of the unbanked population, presenting an opportunity for digital financial services.

Safaricom Ethiopia is poised to expand its network infrastructure further. Over the next two years, with an additional investment nearing two billion dollars, the company aims to access 7,000 sites and achieve 85pc network coverage. Vanhelleputte described the company's commitment to establishing a robust telecommunications network nationwide as part of an "ambitious" expansion plan.

Safaricom Ethiopia anticipates it will take another two years to break even, marking a four-year timeline from its inception.

"We believe we can make it," the CEO told Fortune.

While reflecting the significant startup costs and competitive market dynamics, this projection also reveals the company's long-term strategic approach to its investment in Ethiopia, according to Stanley Njorge, chief financial officer.

The long-term vision is echoed by the company's investors, who remain bullish on the future of Ethiopia's telecom sector.

"Our investors believe in the future of Ethiopia," said Njorge.

Despite some short-term financial indicators like the 4.2pc drop in headline earnings per share reported by Vodacom, a major shareholder in Safaricom Ethiopia, the overarching sentiment remains optimistic. CEO of Vodacom, Shameel Joosub, revealed expectations that earnings and recovery from losses of Ethiopia's business will peak in the financial year.

The optimism is also shared by Safaricom Kenya, another significant shareholder, which presented its half-year report in Nairobi last week, outlining a 10-year strategy for expansion and consolidation. Having its shares diluted to a little over 50pc with the entrance of the International Finance Corporation (IFC) around June, Dilip Pal, CFO of the company, revealed plans to reach 12,000 sites and mid-term goals expected to be realised by 2026.

"We've investment losses to consolidate," said Pal, referring to the operation in Ethiopia. "But, it's still within our overall expectations."

Safaricom Ethiopia's expenditure is substantial, however. The company reported operating costs of nearly 3.9 billion Br in the half-year, with total revenues of over a billion Birr and capital expenditures exceeding 6.4 billion Br. While indicative of the high costs of establishing a telecom operation, these figures reflect the company's investment in building a hold in the market.