Data tops Safaricom Ethiopia earnings as unit eyes profit

Safaricom’s earnings in Ethiopia were largely driven by mobile data last year, whose revenues accounted for more than 50 per cent of the total revenue that the company got in the country.

This is a complete departure from its Kenyan unit, where mobile money accounts for nearly half of the revenues, having taken over from voice and text messages that were its mainstay in the early days.

Mobile data revenue for Safaricom Ethiopia stood at Sh5.6 billion, equivalent to 62.9 per cent of the total revenue of Sh7.91 billion over the year to March 2025. Voice revenues stood at Sh1.17 billion.

Its mobile money platform M-Pesa earned the company Sh12.5 million, with Safaricom now planning to launch Fuliza in Ethiopia in a move that could increase earnings for the company.

“In the year, Safaricom Ethiopia generated Sh8.90 billion in service revenue supported by accelerated growth in customers, which stood at 8.8 million for 90-day active customers,” said Safaricom last Friday when it released financial results for the full year to March 2025.

“Voice revenue grew by 14.1 per cent to Sh1.17 billion, driven by increased usage and a growing number of customers as we continue to accelerate rollout in the country and monetise our sites more efficiently.”

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“Mobile data revenue grew by 35.8 per cent to Sh5.66 billion, supported by sustained high usage levels, customer growth, affordable mobile data offering and a stable and reliable 4G network coverage of the population at 50 per cent.”

The jump in mobile data revenues was on account of an increase in one-month active customers, which Safaricom said more than doubled to 5.28 million during the year. 

The internet provision sector is set for stiffer competition following the entry of broadband internet through the low earth orbit satellite, which Safaricom noted marks “a new era in connectivity”.

M-Pesa, which is still in its early days in Ethiopia, having been launched in late 2023, earned the company Sh12.5 million.

Safaricom said it is gearing up to launch Fuliza in Ethiopia in the coming weeks as it seeks to shore up M-Pesa revenues.

Launched in 2019 in Kenya, the overdraft facility that enables customers to overdraw their M-pesa accounts to complete transactions whenever they are sort of funds has been hugely successful, lending nearly Sh1 trillion to Kenyans last year.

In the year to March 2025, Safaricom firm disbursed Sh981.6 billion in the financial year to March 2025, a 17.7 per cent growth from Sh833.8 billion advanced in 2024.

This translates to Kenyans borrowing about Sh2.69 billion a day. 

The growth patterns that Safaricom Ethiopia is exhibiting are unlike what its operation in Kenya showed in its early days, where 25 years ago, voice and messaging were the sole revenue streams. And while voice has since been overtaken by M-Pesa, it remains key.

In the financial year to March 2025, M-Pesa revenues stood at Sh161.1 billion, accounting for 41.5 per cent of Safaricom revenues that stood at Sh388.1 billion.

Voice came second with revenues of Sh80 billion, translating to 20.6 per cent of total revenue.

Safaricom Ethiopia, still in its formative stages, posted a loss of Sh49.77 billion. The company, however, said the business has moved past the peak investment phase and is expected to turn to profitability by the financial year 2027.

The telco expects the Ethiopian unit to reduce its losses at the operational level by half and its earnings before interest and taxes (EBIT) loss to be between Sh26 billion and Sh23 billion in the year to March 2026, from an EBIT operating loss of Sh54 billion that it reported in the last financial year.

Forex regime

Last year, the company noted that the Ethiopian economy faced significant headwinds as the government reformed its currency regime, which resulted in significant depreciation of the Ethiopian Birr and severe inflation.

“The forex regime changes in Ethiopia weighed down performance in the year. However, localisation of the majority of our contracts, insourcing from local suppliers and industry-wide voice and data pricing corrections have had us mitigate the impact of Birr depreciation, and we remain on course as per the guidance,” said Ndegwa. He also noted that customers faced high interest rates.

“Despite the declining costs of fuel and food, our customers faced increased financial pressure with high interest rates and prevailing fiscal pressure,” he said.

Despite the challenges, Ndegwa noted that the Ethiopian operation benefited from a growing youthful population.

“Yet, we have had powerful tailwinds that profited the commercial momentum of our business. Key among them being our continued network investment in Ethiopia, the expanding digital adoption of the mobile financial services ecosystem in both countries and accelerating data usage fuelling growth,” he said, noting that the unit will in the coming years emerge as a power company in the region owing to such factors as the country’s huge and youthful population.

The country has a population of about 120 million, of which 40 per cent are under the age of 15 years, and 30 per cent are aged between 15 and 20 years.

“Ethiopia presents great opportunities for our business, especially as we target the youthful market. As we adopt a regional approach, we are well-positioned to scale and transform Ethiopia’s digital future,” said Ndegwa.

“As we stay committed to this investment for our shareholders, investors and business… our 4G network now covers 50 per cent of the population with over 3,100 active base stations.”