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

The latest World Bank Ethiopia Telecom Market Assessment Report shows that Safaricom’s entry into Ethiopia has reshaped the country’s telecom market.

• •It has driven down prices, expanded 4G coverage, and pushed millions online.
• •Yet, three years in, the company is still 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.
• •Safaricom Ethiopia launched in October 2022 as the country’s first private telecom operator, breaking Ethio Telecom’s decades-long monopoly.

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Market Disruptor, Not Yet a Winner

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.

The payoff is visible: data prices have fallen 70% since 2017, and mobile broadband users have more than doubled to 87 million.

The report highlights that 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.

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

Its rollout pushed 4G coverage to 49% of the population by early 2025, up from 6% in 2021. Data is now among Africa’s most affordable, with a 2GB basket costing about 0.7% of GNI per capita.

The World Bank estimates telecom liberalization—driven largely by Safaricom’s entry—has added roughly US$3.1 billion (KSh 400.6 billion) to GDP and supported about 900,000 jobs.

Structural Barriers

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

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

The report states that such structural imbalances have left Safaricom competing on retail terms while renting wholesale assets from its state-backed rival.

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 ARPU.
• •The average monthly data ARPU slid from US$1.66 (KSh 214.6) to US$1.19 (KSh 153.8), while effective data prices dropped from 38 U.S. cents (KSh 49.1) per GB to 21 U.S. cents (KSh 27.1).
• •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.

The World Bank report emphasizes that Safaricom’s Ethiopian business remains structurally constrained.

• •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.

Still, the report credits Safaricom’s role in transforming Ethiopia’s digital economy.

Catalyst for Change

In Ethiopia, Safaricom has brought competition, innovation, and expanded mobile money access in a previously closed market. It has also set higher standards for transparency and corporate governance, contrasting Ethio Telecom’s opaque reporting.

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.