Safaricom Ethiopia’s Long Road To Profit: Losses shrink 96 per cent as it nears break-even

Four years after it switched on its network in Ethiopia, Safaricom is within touching distance of making money there.

Safaricom Telecommunications Ethiopia cut its EBITDA loss by 96.5 per cent to Sh434.4 million in the six months to September 2026, down from Sh12.6 billion a year earlier.

The company’s eevenue grew by 71.6 per cent to Sh10.6 billion in that predio in review.

Safaricom Ethiopia says it remains on track to hit EBITDA break-even by the end of the financial year in March 2027.

Safaricom led the consortium that won Ethiopia’s first private telecom licence in 2021, entering a market of more than 120 million people that had been served only by state-owned Ethio Telecom.

Building a national network from scratch meant heavy losses in the early years of operation.

The group revealed that it has put about USD2.84 billion into the business through equity and debt, with Safaricom PLC contributing about USD1.27 billion.

The business is now relying less on equity, and its debt-to-equity ratio has risen to 20 per cent.

Mobile data is the main driver of Safaricom Ethiopia’s growth as it now makes up 74 per cent of Ethiopian service revenue, marking a 90.2 per cent growth to Sh7.9 billion.

Customers use an average of 7.7GB a month, and there are 12.1 million active data users, the firm revealed during the recent release of Safaricom PLC Half-Year 2027 Financial Results.

The customer base grew 38.4 per cent to 15.4 million three-month active customers, while monthly active users rose 43.4 per cent to 12.2 million.

Similarly, the average revenue per user increased significantly by about 36 per cent.

M-PESA, which was launched in Ethiopia in 2023, is quickly gaining ground in the populous country with its 90-day active increasing 54.6 per cent to 5.2 million.

Safaricom PLC has turned airtime retailers into an M-PESA distribution network.

The telco company has also distributed 49,000 QR codes that accept payments from any bank or wallet, and counts 101,000 monthly active merchants.

Safaricom PLC Group CEO Peter Ndegwa says the heavy building phase is largely over as the network now covers about 60 per cent of the population, with 4G coverage at about 68 per cent.

Ethiopia capital spending fell 47.2 per cent to Sh5 billion as the company focuses on getting more use out of its existing sites, partly through infrastructure-sharing agreements.

Safaricom has also launched fibre and 5G fixed wireless services in Addis Ababa, and now serves more than 1,200 enterprise customers.

Safaricom admits that the Ethiopian market remains tough as inflation rose to 14.9 per cent in September, with the birr continuing to weaken amid renewed conflict in the Tigray region.

M-PESA interoperability, which would let customers on other networks use the service, also still remains unresolved.

Even so, Ethiopia contributed 17 per cent of Safaricom Group revenue growth, and its EBIT loss is set to narrow to between Sh12 billion and Sh15 billion this year, from Sh30.1 billion last year.

“Disciplined execution clarified the path to profitability,” Ndegwa said during the Safaricom investor briefing.

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