Ethiopia’s Telecom Giants Raise Tariffs Amid Economic Turbulence
According to ITWeb Africa, both Ethio Telecom and Safaricom Ethiopia have announced tariff increases as they navigate Ethiopia’s challenging economic conditions and rising operational costs. The adjustments come in response to the floating of the Ethiopian birr and mounting capital expenditure needs, signaling far-reaching implications for the country’s telecom sector.
Ethio Telecom and Safaricom Ethiopia Adjust Tariffs
Ethio Telecom confirmed a moderate increase in its tariffs, emphasizing that the move is essential to sustain service quality and support ongoing expansion of the country’s digital infrastructure. Meanwhile, Safaricom Ethiopia implemented a 44% average hike in mobile data charges, marking its most significant pricing adjustment since entering the Ethiopian market two years ago.
These adjustments come in the wake of Ethiopia’s decision in mid-2024 to float its currency, the birr, on international markets. This policy change has led to significant currency depreciation, increasing operational and capital costs for both telecom operators. Safaricom, in particular, has faced heightened challenges, as 85% of its capital expenditure and 50% of its operating costs are tied to foreign currency—primarily U.S. dollars—while revenue is earned in the increasingly devalued local currency.
The Bigger Picture: Telecom in Ethiopia Amid Economic Shifts
Ethiopia’s telecom industry is at a pivotal moment. With Ethio Telecom boasting 86 million subscribers and Safaricom rapidly growing to 11.1 million customers in less than two years, the sector has seen significant expansion. However, such growth comes with financial strain as networks require consistent infrastructure investment. For Safaricom Ethiopia in particular, the company’s aggressive rollout of mobile and internet services has created a need for substantial foreign capital, making it vulnerable to Ethiopia’s volatile foreign exchange environment.
Despite these challenges, there are indications of progress. Parent company Safaricom reported $225 million in net earnings for the six months ending September 2025, driven largely by strong performance in Kenya, its home market. Ethiopian operations, meanwhile, registered narrowed losses as the operator builds toward its goal of breaking even by March 2027.
Expert Analysis: The Ripple Effects on the Telecom Industry
Industry analysts see these tariff hikes as a significant development for telecom competition in Ethiopia, where Safaricom’s entry ended Ethio Telecom’s decades-long monopoly. While raising prices may shore up revenue in the short term, both companies will need to balance affordability concerns in a market with relatively low income levels. This could open opportunities for other providers or technologies, such as satellite broadband, to capture dissatisfied customers.
Furthermore, with Ethio Telecom’s dominant market share, Safaricom’s aggressive pricing strategy and quick infrastructure deployment could pressure the incumbent to further innovate and diversify its offerings to retain high-value customers.
Looking to the broader region, Ethiopia’s telecom sector may serve as a bellwether for foreign investment in emerging markets, particularly those undergoing economic transitions such as currency liberalization. The outcome of these tariff hikes will likely influence how global operators view high-risk, high-reward opportunities in Africa.
What’s Next for Ethiopia’s Telecom Market?
The coming years will be critical for both Ethio Telecom and Safaricom Ethiopia, with the latter aiming to achieve profitability by 2027. While tariff adjustments may stabilize short-term finances, long-term growth will depend on strategic investment, regulatory reforms, and improved economic conditions nationwide.
Will Ethiopia’s telecom market continue to thrive despite economic hurdles? Share your thoughts in the comments below.
