Safaricom In Ethiopia: The Disruptor Turned Underdog

When Safaricom launched in Kenya in 2000, it didn’t just enter a telecom market; it reshaped an economy. By blending aggressive strategy, political lobbying, and technological foresight, it built a near-monopoly. M-Pesa changed how money moved, how people saved, and how businesses operated.

Two decades later, in Ethiopia, that same company finds itself fighting the kind of system it once mastered.

From Market Maker to Market Challenger

Safaricom Ethiopia entered the scene in 2022 full of optimism. Backed by the credibility of its Kenyan success, it saw a vast, underserved market of more than 120 million people and a government eager to open up telecoms after decades of monopoly.

But optimism alone does not shift market power. Ethio Telecom, the state-owned incumbent, has ruled Ethiopia’s communications landscape for more than a century. When liberalisation began, it was already upgrading networks, slashing prices, and pushing its mobile money service, Telebirr, into millions of hands.

By the time Safaricom was licensed to operate M-Pesa, the competition was no longer theoretical. The battlefield was already drawn and tilted.

Inside the Uneven Playing Field

The World Bank’s 2025 Ethiopia Telecom Market Assessment makes it clear: while liberalisation is real, the reform remains incomplete.

Ethio Telecom still controls the backbone fibre network, transmission infrastructure, and most of the towers. Safaricom has had to build nearly 60 percent of its own sites because access to shared infrastructure was either blocked or too costly. That means heavy capital expenditure, high operating costs, and a longer road to profitability.

Even pricing isn’t neutral. Ethio Telecom has been charging below the Mobile Termination Rate (MTR) set by the regulator, essentially subsidising on-net calls while making off-net calls more expensive. For Safaricom, matching those prices means selling at a loss.

Add to that the selective blocking of apps, limited wallet interoperability, and an untested regulator still finding its footing, and the challenge becomes clearer. Safaricom is in a market that talks competition but still behaves like a monopoly.

The Financial Reality Check

The numbers tell their own story. In FY 2024, Safaricom Ethiopia lost around $325 million, more than six times its total revenue of roughly $54 million.

Its market share by revenue is just under 8 percent. Meanwhile, it pays millions each year in infrastructure leasing fees to its competitor.

Ethiopia’s data prices are among the lowest in Africa. A 2 GB bundle costs about 0.7 percent of GNI per capital, great for consumers, brutal for margins. Safaricom’s model, built on high-volume, moderate-margin growth, will take years to work in such conditions.

Still, there’s demand. The country’s mobile subscriptions nearly doubled between 2018 and 2024 to 87 million, and mobile broadband users now exceed 54 million. Ethiopia’s youth, its expanding digital economy, and its urban growth all point to massive long-term potential if Safaricom can survive the short-term squeeze.

When the Tables Turn

There’s irony in watching Safaricom on the receiving end of tactics it once used to protect its dominance in Kenya: exclusive distribution, on-net price discrimination, slow interoperability, and regulatory influence.

But Ethiopia isn’t Kenya. The political economy here is different. Telecom isn’t just business; it is infrastructure of national sovereignty. Each tower, each licence, each mobile wallet sits at the intersection of politics and policy.

Safaricom must now navigate that reality, learning diplomacy, not just disruption.

The Future in the Balance

The World Bank estimates that a 10 percent increase in broadband penetration could add 2.5 percent to Ethiopia’s GDP. That’s why telecom reform isn’t just about market share; it’s about economic transformation.

If the government enforces open access to infrastructure, cost-based interconnection, and genuine regulatory independence, competition could thrive. Safaricom would then have the space to leverage what it does best: scale, innovation, and operational discipline.

But if protectionism lingers, the risk is clear. Investment will stall, innovation will slow, and Ethiopia’s digital promise will dim.

Lessons for Safaricom

Safaricom must rethink what made it powerful. In Kenya, its strength came from regulatory favour and first-mover advantage. In Ethiopia, success will depend on policy patience, local partnerships, and efficiency.

The company’s best bet is to focus on three fronts:

Data dominance: Win urban markets through faster, more reliable internet.
Digital services: Layer fintech, content, and enterprise solutions on top of connectivity.
Constructive lobbying: Push for regulatory enforcement, not privilege.

This isn’t a race of speed; it’s one of endurance.

What’s at Stake

Safaricom’s journey in Ethiopia is more than a corporate expansion story. It’s a live test of whether African liberalisation can move beyond symbolism into substance.

For once, the continent’s biggest telecom disruptor isn’t rewriting the rules; it’s struggling under them.
And in that struggle lies the most important lesson of all: dominance at home offers no immunity abroad.

Ethiopia may be teaching Safaricom what true competition feels like. And that, paradoxically, could be the making of its next evolution.