Safaricom Ethiopia Revenue Surges as Customer Growth and M-PESA Expansion Accelerate

Safaricom reported a sharp rise in earnings for the financial year ended March 2026, driven by strong performance in Kenya and a significant reduction in losses from its Ethiopia operation—strengthening investor confidence in one of Africa’s most closely watched telecom expansion projects.

The telecom giant posted service revenue of $3.21 billion, while normalized net income rose by 67.3 percent to $772 million. Group EBIT also climbed sharply, exceeding the company’s own guidance range and reflecting stronger-than-expected operational performance.

Kenya Remains the Profit Engine

Safaricom’s Kenyan business continued to anchor group profitability. Revenue from Kenya reached $3.10 billion, supported by sustained growth in mobile data, fixed internet services, and M-PESA.

Net income from the Kenyan market increased by nearly 25 percent, reaffirming the country’s role as Safaricom’s primary earnings base even as the group accelerates regional expansion.

Ethiopia Begins Shifting From Expansion Burn to Growth Phase

The more strategically important development, however, came from Safaricom Ethiopia, where losses narrowed substantially as the company scaled operations and expanded customer adoption.

Safaricom Ethiopia’s service revenue increased by 58.3 percent to $109 million, driven by rapid customer growth and increasing usage of voice, mobile data, and digital financial services.

Mobile data accounted for nearly 68 percent of revenue, highlighting the company’s positioning as a data-driven telecom operator in Ethiopia’s evolving digital market.

The company’s active customer base also expanded rapidly:

• 90-day active users rose to 13.63 million
• One-month active users reached 10.75 million
• Active M-PESA users climbed to 5.2 million

Transaction volumes through M-PESA Ethiopia rose significantly, signaling early traction in a market still dominated by Ethio telecom and its telebirr ecosystem.

Ethiopia Expansion Accelerates

Safaricom Ethiopia is now showing stronger operational momentum as customer growth, network expansion, and rising M-PESA adoption begin translating into meaningful revenue scale.

Service revenue more than doubled during FY26, supported primarily by mobile data usage, expanding smartphone penetration, and increasing demand for digital financial services. Mobile data remained the company’s largest revenue driver, while voice services also recorded solid growth as network usage increased across urban and regional markets.

The company expanded its infrastructure footprint to 3,504 active sites and achieved 59 percent 4G population coverage, strengthening connectivity access across the country.

Safaricom Ethiopia’s active customer base continued growing rapidly:

• 13.6 million 90-day active users
• 10.7 million monthly active users
• 5.2 million M-PESA users

M-PESA adoption more than doubled year-on-year, highlighting accelerating demand for mobile money and digital payment services in Ethiopia’s evolving fintech market.

Safaricom Group said Ethiopia contributed approximately 15 percent of total group service revenue growth during FY26, signaling that the operation is beginning to evolve from a high-cost expansion project into a strategically important growth market.

The company also confirmed that losses narrowed substantially during the year, with management now targeting EBITDA breakeven in FY27.

 

Losses Narrow Sharply

One of the most closely watched indicators for investors was the reduction in Ethiopia-related losses.

Safaricom Ethiopia’s EBITDA loss narrowed dramatically from approximately $333 million to $117 million, while operating losses and net losses also improved substantially year-on-year.

“Profitability is taking shape,” said Dilip Pal, describing the Ethiopia business as showing stronger momentum in the second half of the fiscal year.

The improvement suggests the operation may be gradually moving beyond its most capital-intensive start-up phase.

Ethiopia Still a High-Risk, High-Potential Market

Safaricom entered Ethiopia in 2021 after the government awarded a telecom license to the Global Partnership for Ethiopia consortium, ending decades of state monopoly in the telecom sector.

The venture quickly became one of the country’s largest foreign direct investments but also faced significant challenges, including:

• Foreign exchange volatility
• Inflationary pressure
• Security concerns
• Heavy infrastructure costs
• Competition from the incumbent state operator

Despite these challenges, Safaricom Ethiopia has expanded aggressively since launching commercial operations in 2022. By March 2025, the company reported network coverage reaching half of Ethiopia’s population, backed by more than $2.6 billion in investment.

Digital Finance Battle Intensifies

The telecom competition increasingly extends beyond voice and internet services into digital finance.

While M-PESA Ethiopia is gaining traction, Ethio telecom maintains a substantial lead through telebirr, which reported:

• 58.61 million users
• 1.94 trillion birr in transactions

This means Safaricom’s long-term success in Ethiopia will depend not only on telecom infrastructure but also on its ability to scale financial services in a market where digital payments are becoming strategically important.

Reform Environment Shapes Future Outlook

The broader macroeconomic environment remains a key factor for Safaricom’s future in Ethiopia.

The country’s transition to a market-based foreign exchange regime has improved currency market flexibility but also exposed businesses to greater exchange-rate volatility. Meanwhile, IMF-backed reforms continue pushing tighter monetary policy and fiscal discipline aimed at stabilizing the economy and attracting private-sector investment.

Safaricom expects Ethiopia’s losses to narrow further in FY27, reinforcing the company’s view that the market remains a long-term strategic investment despite near-term risks.

A Business Still in Transition

The latest results do not signal a completed turnaround for Safaricom Ethiopia. The operation remains heavily investment-driven and dependent on network expansion, customer acquisition, regulatory stability, and digital finance growth.

What the numbers do show is a shift in direction.

Ethiopia is moving from being purely a start-up cost center toward becoming a material contributor to Safaricom’s long-term growth story—a transition investors have been waiting to see.