Fortune News | Mar 18,2023
Safaricom’s Ethiopian bet, defined by the cost of entering one of Africa’s last closed telecom markets, began to look less like an expensive experiment late in the current financial year.
A change in retail tariff rules gave the operator room to lift prices, turning data into a sign the business could narrow losses and become central to the Kenyan Group. The Ethiopian Communication Authority (ECA) introduced cost-based tariff regulations in late 2024, helping Safaricom Ethiopia register a 33.8pc quarter-on-quarter jump in data revenue in the final quarter.
Startup losses fell 41.2pc to 159 million dollars. In the second half, its losses before subtracting interest, taxes, and non-cash charges like depreciation and amortisation narrowed to 20.8 million dollars, from 95.9 million dollars, in the first half. Service revenue in Ethiopia more than doubled to 15.9 billion Br, contributing roughly 15pc to group service revenue growth.
Group CEO Peter Ndegwa called the year a “major turning point,” saying the business is on a “clear trajectory” toward break-even in the 2027 fiscal year.
It was a change for a venture requiring large capital outlays, regulatory patience and localisation.
Safaricom reported 10.4 million data users in Ethiopia, with an average monthly usage of 6.9 GB, 1.4 times that in Kenya. M-Pesa Ethiopia also gained scale, with active customers rising 119pc year-on-year to 5.2 million, supported by a merchant network of 70,000. Ndegwa said Ethiopia has become a “material part of our Group,” adding that “Ethiopians must deliver digital Ethiopia.” The company has reduced expatriate staff to 19 specialists.
According to Dilip Pal, the Group’s chief financial and innovation officer, Ethiopia’s impact on the Group's performance is “not future, it’s already present.”
"The pathway to break-even and profitability is definitely taking shape,” he said, attributing his optimism to continued growth in data use after price adjustments.
Financial pressure is easing as the largest rollout bills begin to pass. Safaricom expects capital expenditure in Ethiopia to fall by 50pc in the 2027 fiscal year to between 46.5 million and 69.8 million dollars as the company moves from Greenfield expansion to a steadier investment profile. The Group reported record net income attributable to shareholders of 773.7 million dollars.
By March 2026, total funding for Safaricom Ethiopia had reached 2.65 billion dollars. The subsidiary is increasingly using its own balance sheet, including 234 million dollars of foreign-currency debt, thereby reducing reliance on Group equity. Advisory Board Chairman Ermias Eshetu attributed the progress to “discipline and operational excellence” within the team and to broader government reforms, which are making Ethiopia an investment destination.
Yet the same price changes have sharpened the affordability question. According to Balcha Roba, director general of the Ethiopian Communication Authority,speaking at fiance forward summit done CBE's headquarters, affordability remains central to telecom reforms.
"Lower digital transaction costs are expanding financial inclusion, particularly for low-income groups," he said. "Digital connectivity is cutting travel costs for rural customers who no longer visit bank branches."
He cited remaining tension, including person-to-person payment structures and transfer fees that still burden users.
Both Safaricom and Ethio telecom have adjusted prices in recent cycles, reflecting a sector searching for a balance between investment and affordability. Wim Vanhelleputte, Safaricom Ethiopia’s CEO, described the country as a vast “retail business” opportunity, citing demographic scale where daily births exceed 10,000, more than in the European Union (EU). He projected that the market needs about five billion dollars in infrastructure investment over the next two to three years to double tower capacity from 15,000.
Speaking at the EU Chamber summit in Addis Abeba, Vanhelleputte, attracting that capital depends on profitability. Profit is “not a dirty word,” he said, but a requirement for sector expansion. He also advises that “cultural humility” is essential for foreign investors, while the entry of a third operator would signal the maturity of liberalisation.
The regulator has set long-term targets of 99pc 4G population coverage and 5G expansion to 100 cities within five years. For customers, network gains are arriving with higher bills.
Alazar Eshetu, an assistant brand manager and content creator, has felt the change. He praised the network quality but found that inconsistent pricing and rising costs are eroding user trust. Safaricom’s unlimited monthly package jumped 46pc in four months to 2,475 Br in April when paid through M-Pesa, with direct purchases costing more.
Alazar called for transparent pricing that does not shift monthly, warning that affordability is becoming a breaking point even for loyal customers. He now treats data as a limited resource, shifting uploads to off-peak hours and relying on outside Wi-Fi.
For Tewelde Zemichael, co-founder and CEO of Geez Education & Training and former Ethio telecom employee, telecom sustainability in a price-sensitive market depends on balancing quality with affordability. He urged Safaricom to diversify revenue beyond price increases, use AI-driven automation to lower costs, expand into fintech, health, agri and education techs, and deepen local talent development.
"Infrastructure sharing with Ethio telecom could improve efficiency, while stronger B2B cooperation would support long-term sector resilience," said Tewelde.
PUBLISHED ON
May 09,2026 [ VOL
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