Safaricom is Changing the Telco Game in Ethiopia

Safaricom Ethiopia is Winning Users but Bleeding Cash, World Bank Says

By Harry Njuguna

The latest World Bank Ethiopia Telecom Market Assessment Report shows that Safaricom’s entry into Ethiopia has reshaped the country’s telecom market but is straining the telco’s balance sheet.

• Safaricom Ethiopia launched in October 2022 as the country’s first private telecom operator, breaking Ethio Telecom’s decades-long monopoly.

• Its entry has driven down prices, expanded 4G coverage, and helped bring millions more online. 

• Yet, three years in, the company is bleeding cash: Its FY2024 losses hit US$325 million (KSh 42.0 billion) against revenue of only US$53.6 million (KSh 6.9 billion), making its Ethiopian venture both a reform catalyst and a financial warning.

The firm paid US$1 billion (KSh 129.2 billion) for its license and has since invested over ETB 300 billion (about US$2.2 billion, KSh 284.3 billion) in network rollout and infrastructure. 

Safaricom has built solid traction in a short time. By early 2025, the company had around 5.2 million active voice users, 4.9 million data users, and 8.3 million m-Pesa customers. 

The payoff is visible: data prices have fallen 70% since 2017, and mobile broadband users have more than doubled to 87 million. It has also set higher standards for transparency and corporate governance, contrasting Ethio Telecom’s opaque reporting.

Data now makes up 72% of its total revenue and more than 80% of its mobile service income. Average monthly data usage per customer jumped to 6.7 GB, surpassing Kenya’s per-user consumption.

The Costs of Being First

Despite these gains, the World Bank notes that Safaricom’s expansion has come at a steep cost. Revenue currently covers neither the annual license amortization of US$66.7 million (KSh 8.6 billion) nor the ongoing network and backhaul expenses.

The company pays over US$3 million (KSh 388 million) annually to Ethio Telecom for fiber leasing due to a lack of independent TowerCos and InfraCos.

Ethiopia’s currency crisis has magnified Safaricom’s losses, according to the World Bank assessment.  The birr’s fall from 55 to 138 per U.S. dollar between 2024 and 2025 cut dollar-equivalent revenue and drove down ARP. Ethio Telecom can sustain lower tariffs, around 16 U.S. cents (KSh 20.7) per GB, by cross-subsidizing data with voice profits—a luxury Safaricom lacks.

• Regulatory reforms are incomplete: TowerCos, InfraCos, and MVNOs are still unlicensed, and no cost-based interconnection framework exists.

• The result is a tilted playing field where Ethio Telecom enjoys lower costs and favorable access to critical infrastructure.

• The World Bank warns that without regulatory equalization, Safaricom’s investment may remain loss-making indefinitely.

Safaricom brought competition, innovation, and mobile money to a previously closed market.

But the cost of being first is high. The report underlines that Safaricom’s losses highlight the risks of entering a partly liberalized market too early.

Unless Ethiopia accelerates reforms—enabling infrastructure sharing, transparent pricing, and fair interconnection—the company’s Ethiopian venture may remain a cautionary tale for investors.

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