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Safaricom’s bold move into Ethiopia has reshaped the country’s telecommunications industry, bringing competition, lower data prices, and faster internet access to millions of new users. However, a new World Bank Ethiopia Telecom Market Assessment Report warns that while the Kenyan operator has become a major reform catalyst, it remains deeply unprofitable three years into its operations.
According to the report, Safaricom Ethiopia posted a net loss of US$325 million (KSh 42 billion) in its 2024 financial year, against revenue of only US$53.6 million (KSh 6.9 billion). The company’s expansion into the Horn of Africa nation has been one of Africa’s most closely watched telecom ventures, as it marked the end of Ethio Telecom’s decades-long monopoly and the beginning of Ethiopia’s gradual telecom liberalisation.
Safaricom Ethiopia, which launched commercial services in October 2022, entered the market after paying US$1 billion (KSh 129.2 billion) for its licence. Since then, it has invested more than ETB 300 billion (US$2.2 billion or KSh 284 billion) in infrastructure, base stations, and 4G rollout across the country.
The investment is beginning to show visible impact. Data prices in Ethiopia have fallen by nearly 70 per cent since 2017, and mobile broadband users have more than doubled to 87 million, the World Bank report stated. By early 2025, Safaricom had 5.2 million active voice users, 4.9 million data users, and 8.3 million M-Pesa customers.
Data now accounts for 72 per cent of the company’s total revenue and over 80 per cent of its mobile service income, a reflection of the strong demand for internet services in the market. Average monthly data usage per customer rose to 6.7 gigabytes, surpassing Kenya’s national average.
Safaricom’s rollout has also expanded 4G coverage to nearly half of Ethiopia’s population (49 per cent), compared to only 6 per cent in 2021. The country now enjoys some of the most affordable data rates in Africa, with a 2GB basket costing about 0.7 per cent of Gross National Income per capita.
The World Bank estimates that telecom liberalisation, largely driven by Safaricom’s entry, has added about US$3.1 billion (KSh 400.6 billion) to Ethiopia’s GDP and supported roughly 900,000 jobs.
However, despite these achievements, Safaricom’s business in Ethiopia remains financially strained. The World Bank report notes that current revenue levels are insufficient to cover annual licence amortisation costs of US$66.7 million (KSh 8.6 billion) or ongoing network operations and maintenance. The company also pays over US$3 million (KSh 388 million) yearly to Ethio Telecom for fibre leasing, as independent Tower Companies and Infrastructure Companies (InfraCos) are yet to be licensed.
This situation, according to the report, has forced Safaricom to compete on retail terms while relying on its main competitor for wholesale network access—an arrangement that severely limits profitability.
Ethiopia’s currency depreciation has further worsened Safaricom’s losses. The Ethiopian birr fell sharply from 55 to 138 per U.S. dollar between 2024 and 2025, slashing dollar-equivalent revenues and reducing the average revenue per user (ARPU). Monthly data ARPU declined from US$1.66 (KSh 214.6) to US$1.19 (KSh 153.8), while effective data prices dropped from 38 cents (KSh 49.1) to 21 cents (KSh 27.1) per gigabyte.
Meanwhile, Ethio Telecom continues to sustain lower tariffs—around 16 cents (KSh 20.7) per gigabyte—by cross-subsidising data services with profits from voice calls, an advantage Safaricom does not have.
The World Bank warns that Safaricom’s Ethiopian business remains structurally constrained due to incomplete regulatory reforms. The absence of licensed TowerCos, InfraCos, and Mobile Virtual Network Operators (MVNOs), as well as the lack of a cost-based interconnection framework, creates a tilted playing field that favours the state-owned Ethio Telecom.
Without urgent regulatory equalisation and reforms to allow infrastructure sharing and fair pricing, Safaricom’s Ethiopian venture could remain loss-making indefinitely, the report cautioned.
Nevertheless, the bank acknowledged that Safaricom has transformed Ethiopia’s digital landscape, improving connectivity, introducing mobile money through M-Pesa, and setting new benchmarks in corporate governance and transparency. It has also stimulated innovation and opened doors for fintech, digital trade, and mobile-based public services.
The report concludes that while Safaricom’s early entry has been costly, it remains a critical driver of market reform. The experience offers valuable lessons for both investors and regulators on how to balance liberalisation with sustainability.
Unless Ethiopia accelerates reforms to promote fair competition and enable cost-effective operations, Safaricom’s pioneering venture could serve as a cautionary tale—a reminder that liberalisation without structural support can transform markets but still leave investors bleeding.
