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* Plans joint bid for Ethiopia licence with Vodacom
* Expects licence to cost around $1 bln
* First-half core profit up 12.7%, M-Pesa revenue up 18%
(Recasts on Ethiopia plans)
By Duncan Miriri
NAIROBI, Nov 1 (Reuters) - Kenya's Safaricom plans
to bid for one of two Ethiopian telecoms licences next year in
partnership with South Africa's Vodacom, it said after
posting a jump in first-half profit on Friday.
East Africa's most profitable company hopes to replicate its
Kenyan success in neighbouring Ethiopia, acting CEO Michael
Joseph said.
"It is the biggest prize left in Africa from a
telecommunications point of view," he told an investor briefing,
referring to Ethiopia's huge protected market and population of
more than 100 million.
Officials plan to award two telecoms licences to
multinational mobile companies by April 2020, the Ethiopian
communications regulator said last month, as it opens up its
market to foreign investors.
Ethio Telecom, the state monopoly, has also taken steps
towards offering a minority stake to a strategic investor.
Safaricom is considering all the options, Joseph said.
Companies that want to secure the licences have to come with
deep pockets, he added.
"You have to bid for the spectrum. There is talk about it
and it is in the billion-dollar range, just for the licence," he
told Reuters.
Other challenges include a nascent democracy initiated by
Prime Minister Abiy Ahmed, foreign exchange shortages and
delayed new regulations for the telecoms sector, he added.
Safaricom has signed an agreement with an unidentified
Ethiopian firm to introduce its M-Pesa mobile financial service
in the country, said the interim CEO.
PROFIT JUMP
Safaricom, partly owned by Vodacom and Britain's Vodafone
, stuck to its full-year guidance after reporting a 12.7%
jump in first-half core earnings, helped by M-Pesa.
Revenue from M-Pesa, which allows users to send cash, save,
borrow and pay for goods and services, soared 18.2% in the six
months to Sept. 30.
Safaricom's Service revenue grew at 5.3%, down from 7.7% a
year earlier, as the company cut tariffs in response to
increased competition and pressure on consumer incomes.
"For a period in which they have cut rates, the revenue
growth is acceptable," said Standard Investment Bank analyst
Lisa Kimathi.
Safaricom shares were up 1.5% at 30.20 shillings by 1110
GMT.
Joseph will be replaced in April by Peter Ndegwa, a Kenyan
executive at Diageo Europe. Joseph took over as acting CEO when
long-serving CEO Bob Collymore died in July and a replacement
was delayed after the government, which holds a 35% stake in
Safaricom, insisted that a Kenyan be chosen to head the company.
Chairman Nicholas Ng'ang'a said the board is confident the
CEO designate will help the company to grow.
"We are looking at the possibilities of expansion and growth
both in and out of the country and we expect that this change is
going to firm up that strategy," he said.
($1 = 103.1500 Kenyan shillings)
(Editing by David Goodman)
