Safaricom Ethiopia reduced its losses by 52.83 percent in the six months to September 2025, signalling a turnaround in the subsidiary’s performance, which was attributed to forex reforms and the stabilising security situation in Africa’s second most populous nation.

Safaricom Plc, Kenya’s largest company by market value, launched commercial operations in Ethiopia in October 2022, ending years of Ethio Telecom’s monopoly. However, Safaricom Telecommunications Ethiopia (STE) Plc, the subsidiary, has reported losses every financial year.

These losses have, however, declined significantly to Ksh13.3 billion ($103.1 million) in the first half of the 2025/26 financial year, down from Ksh28.2 billion ($218.6 million) in the same period last year.

According to the group’s unaudited financial statements released on Thursday, nearly all key business lines, save for the mobile money service platform M-Pesa, are registering positive growth.

Safaricom Group CEO Peter Ndegwa said the Ethiopian business continues to demonstrate encouraging momentum, largely driven by improving foreign exchange regime reforms, which continue to shape the operating environment, coupled with the stabilising security situation in the Tigray and Oromia regions.

In the aftermath of the pandemic and the internal regional conflicts, the country is now moving forward towards macroeconomic stabilisation. All the key macroeconomic indicators are on a positive path,” Mr Ndegwa told an investor briefing in Nairobi on Thursday.“Our focus remains on launching transformative products, elevating customer service, and executing impactful marketing campaigns that resonate with our diverse customer base. We are also deepening strategic partnerships with organisations that share our values, enabling us to accelerate growth in new markets and extend our reach beyond Kenya and Ethiopia.”STE revenuesAccording to the interim financial statements, Safaricom Ethiopia’s voice revenue quadrupled to Ksh1.37 billion ($10.62 million) in the six months to September 30, driven by increased customer activity and sustained growth in the customer base, while messaging revenue also tripled to Ksh74.15 million ($574,806), supported by a sharp rise in active SMS users.

Mobile data revenue doubled to Ksh4.13 billion ($32.01 million), driven by increased customer usage, strong growth in the subscriber base, and enhanced smartphone penetration initiatives,Fixed service and wholesale transit revenue rose 400 percent to Ksh93 million ($720,930.23), supported by increased connections.

M-Pesa revenue, however, fell by 45.6 percent to Ksh8.7 million ($67,441.86) during the period under review.

Service revenue more than doubled to Ksh6.19 billion ($47.98 million), supported by strong momentum in customer acquisition and increased usage.

The revenue mix at Safaricom Ethiopia continued to evolve, with mobile data contributing 66.7 percent of the total, voice 22.1 percent, with the balance coming from messaging, M-Pesa, fixed service and incoming revenue.“Overall, mobile data now contributes 66.7 percent to service revenue in Ethiopia, underscoring its central role in driving growth and digital inclusion,” Safaricom says.“The performance reflects Safaricom’s continued investment in network expansion, device accessibility, and compelling data offerings tailored to evolving customer needs.”The number of 90-day active customers surged by 83.7 percent to reach 11.15 million, while one-month active customers rose by 90 percent to 8.51 million.“We are encouraged by accelerated momentum on customer acquisition in Ethiopia. We are seeing positive shifts in brand perception and ecosystem collaboration, which give us confidence that Safaricom Ethiopia is on a sustainable path to scale,” Mr Ndegwa said.“Our priority remains to invest prudently, build local talent, and contribute to Ethiopia’s broader digital transformation journey.”The main shareholders of Safaricom Ethiopia are Safaricom Plc (55.7 percent), Sumitomo Corporation (27.2 percent), and CDC Group, now British International Investment, (10.9 percent).

These companies are part of a consortium that also includes Vodacom Group, which holds a 6.2 percent stake, and the International Finance Corporation (IFC).

“We operated in a challenging environment across Kenya and Ethiopia, marked by intensified competition and evolving regulatory frameworks,” Mr Ndegwa said.“We believe our business is well-positioned to unlock economic potential in Kenya and Ethiopia.”Profit surgeThe group’s overall net income rose by 52.3 percent to Ksh42.8 billion ($331.78 million) from Ksh28.1 billion ($217.82 million), supported by improving performance in both Kenya and Ethiopia.

Safaricom recently revised the break-even point of its Ethiopian operations to 2027, a year later than previously projected owing to the significant depreciation of the Ethiopian currency (the birr) and ongoing foreign exchange reforms, which have raised operational costs.

Ethiopia is undertaking massive economic reforms to liberalise critical markets, including the financial sector in a bid to attract foreign investment to an economy that is currently grappling with prolonged foreign currency shortages.

Since Prime Minister Abiy Ahmed took over in 2018, the country has been gradually opening up its tightly controlled economy.

In December 2024, the Ethiopian Parliament approved a groundbreaking banking proclamation allowing foreign banks to enter the country’s financial sector.

These reforms permit foreign financial institutions to establish subsidiaries, open branches or representative offices, and acquire shares in existing local banks.

Abiy’s administration had been facing mounting pressure from the World Bank and the International Monetary Fund to float the country’s currency and implement critical reforms in the foreign exchange market as a requirement for financial support from the Bretton Woods institutions.

The National Bank of Ethiopia has regularly been reviewing the performance of the foreign exchange market since the transition to a new forex regime on July 29, 2024.

It also started implementing an interest rate-based monetary policy regime in July (2024) as part of key financial sector reforms aimed at aligning the sector to international best practices and push the country to a pole position to ease the operations of foreign banks.

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