For years, Ethiopia was viewed as Africa’s final major telecom frontier — a vast market of more than 120 million people with enormous digital potential but equally enormous operational and political complexity. Now, the latest results from Safaricom Group suggest that the long and expensive gamble is beginning to show measurable returns.
The company reported a sharp improvement in its FY26 financial performance, with Group net income rising 67.3% year-on-year to KShs 99.7 billion, while revenue climbed 11.1% to KShs 414.1 billion. The turnaround comes as losses from its Ethiopian operation begin to narrow significantly — a development increasingly central to the company’s long-term African growth narrative.
At the heart of the story is Ethiopia itself.
According to figures released by the Group, Safaricom Ethiopia generated KShs 14.1 billion in revenue, up 58.3% year-on-year. EBITDA losses narrowed by nearly 65%, while net losses declined more than 41%, signaling accelerating operational traction in one of Africa’s most difficult but potentially transformative telecom markets.
The numbers may still reflect a business in investment mode, but the direction is unmistakable.
Ethiopia Moves From Cost Center to Strategic Growth Engine
In a statement accompanying the results, Board Chairman Ermias Eshetu framed the company’s Ethiopia expansion not simply as a commercial venture, but as a long-term strategic conviction.
He noted that Safaricom Ethiopia now contributes roughly 15% of Group revenue — a remarkable figure for a relatively young operation that launched commercially only a few years ago after Ethiopia liberalized its telecom sector.
The significance extends beyond corporate earnings.
Safaricom’s entry into Ethiopia represented one of the continent’s most closely watched investment stories, arriving after decades of state monopoly control over telecommunications. The opening of the sector under Prime Minister Abiy Ahmed was viewed by global investors as a test case for Ethiopia’s broader economic reform agenda.
Those reforms came amid major macroeconomic stress, foreign exchange shortages, political instability, and infrastructure challenges. Yet Safaricom continued expanding aggressively — building towers, onboarding subscribers, investing in digital financial services, and attempting to establish itself in a market long dominated by the state-owned incumbent.
The latest results suggest the strategy is beginning to stabilize.
The Real Prize Is Not Telecom — It Is Digital Finance
While network expansion remains important, industry analysts increasingly view Ethiopia’s true long-term value as financial digitization.
Ethiopia remains one of Africa’s largest underbanked economies, with substantial room for mobile money growth, digital payments, e-commerce infrastructure, and broader fintech integration. Safaricom’s experience with M-Pesa in Kenya gives the Group a potentially powerful advantage as Ethiopia gradually modernizes its financial ecosystem.
Executives have repeatedly emphasized that the Ethiopian opportunity should be viewed over decades rather than quarters.
The market’s demographics strengthen that thesis. Ethiopia possesses one of Africa’s youngest populations, rapidly rising smartphone adoption, expanding urbanization, and growing demand for digital services ranging from payments and lending to entertainment and online commerce.
For Safaricom, this creates a possibility far larger than conventional telecom revenue growth.
It creates the possibility of becoming foundational digital infrastructure.
Investors Are Watching the Losses Narrow Closely
The Ethiopian business remains loss-making, but the pace of improvement is now becoming difficult for investors to ignore.
EBIT losses narrowed by more than 50%, while EBITDA losses also improved substantially. For large-scale telecom expansions, this phase is often critical: once infrastructure spending begins moderating and subscriber monetization improves, operational leverage can accelerate rapidly.
Safaricom’s core Kenyan business continues to remain highly profitable, generating:
- KShs 400.8 billion in service revenue
- KShs 233.9 billion EBITDA
- KShs 119.1 billion in net income
That profitability gives the Group unusual capacity to sustain long-horizon investments in Ethiopia while absorbing early-stage losses.
In many ways, Kenya is funding Safaricom’s Ethiopian future.
Ethiopia’s Reform Narrative Gains a Powerful Corporate Endorsement
Beyond the numbers, the results also carry symbolic weight for Ethiopia’s investment image.
At a time when Ethiopia is simultaneously pursuing banking liberalization, foreign exchange reforms, logistics modernization, and private-sector expansion, Safaricom’s improving performance provides a rare large-scale example of international capital beginning to gain traction inside the reform environment.
Ermias Eshetu explicitly credited Ethiopia’s telecom liberalization efforts and broader structural reforms for creating measurable investment outcomes.
That message matters.
Global investors often judge reform credibility not through policy announcements alone, but through whether major corporations can eventually convert investment into scalable growth.
Safaricom’s trajectory increasingly suggests that they can.
Still Early — But the Scale Is Enormous
Despite the optimism, challenges remain substantial.
Telecom infrastructure costs remain high, currency pressures persist, competition is intensifying, and Ethiopia’s broader macroeconomic transition remains delicate. Building nationwide digital infrastructure across a country of Ethiopia’s size also requires enormous capital expenditure and long operational timelines.
But few African markets offer equivalent scale.
For Safaricom, Ethiopia is no longer merely an ambitious expansion project. It is becoming central to the Group’s future identity.
And if the current trajectory continues, the company’s Ethiopian operation may eventually be remembered not as an expensive gamble — but as one of Africa’s most consequential telecom investments of the decade.
