Ethiopia’s Telecom Operators Raise Tariffs Amid Macroeconomic Challenges

According to Developing Telecoms, both Ethio Telecom and Safaricom Ethiopia have announced significant tariff increases, citing Ethiopia’s current macroeconomic environment and the need for continued investments in network expansion and service quality. Ethio Telecom introduced a moderate adjustment, while Safaricom Ethiopia announced an average 44% hike in mobile data prices—the company’s steepest pricing move since it entered the Ethiopian market in 2022.

Ethio Telecom and Safaricom Ethiopia: Details on the Tariff Hike

The tariff changes by Ethiopia’s two major telecom players reflect a challenging financial environment spurred by the Ethiopian government’s decision to let the local currency, the birr, float freely in mid-2024. This policy has severely depreciated the birr, impacting operational expenses and capital investments, especially for companies like Safaricom Ethiopia. Reports indicate that Safaricom has been particularly affected, as approximately 85% of its capital expenditures and 50% of its operational costs are tied to foreign currencies, primarily U.S. dollars, while revenues are earned in the local currency.

Ethio Telecom, with its dominant market position and 86 million estimated subscribers, has framed its adjustments as essential for sustaining service quality and expanding digital infrastructure. On the other hand, Safaricom Ethiopia, a relatively new entrant with 11.1 million subscribers as of late 2025, describes the move as necessary to counter rising costs and maintain competitive services.

Market Context: Why Tariff Hikes Matter for Ethiopian Telecom

Ethiopia is one of Africa’s last major telecom markets to embrace liberalization. Safaricom Ethiopia’s entry in 2022 ended Ethio Telecom’s decades-long monopoly, and foreign investments have poured in to modernize the country’s telecom infrastructure. However, the macroeconomic turbulence, driven largely by currency depreciation and rising inflation, is threatening industry profitability.

For Safaricom, the stakes are particularly high. The company has been aggressively investing to expand its network across Ethiopia, with the goal of breaking even by March 2027. This includes the rollout of mobile money services, which have already shown promising growth. Safaricom’s global parent company reported $225 million in net earnings for the six months leading up to September 2025, indicating a recovery after prior challenges. Meanwhile, Ethio Telecom continues to dominate with its larger user base but may face increasing pressure to innovate and retain customers as competition heats up.

Future Outlook: Expert Perspectives on Industry Implications

The tariff hikes mark a pivotal moment for Ethiopian telecom. While necessary to shield operators from economic volatility, higher prices could strain consumer affordability. Industry analysts believe this could create a balancing act where operators must optimize revenues without alienating price-sensitive customers.

Moreover, the depreciation of the birr underscores the reliance of Ethiopian telecom operators on foreign currency for infrastructure procurement and operations. This could further incentivize local production of telecom equipment or partnerships aimed at minimizing foreign currency exposure. Additionally, with a growing demand for mobile data in Ethiopia’s young, increasingly connected population, both companies are likely to focus on improving data speeds and coverage to justify higher prices.

Safaricom’s ambitions remain significant, with mobile money emerging as a key driver for future growth in Ethiopia. If the company can maintain its strong subscriber growth trajectory and build trust in its financial services, it may find a pathway toward achieving profitability within its stated timeline.

Conclusion: Will Ethiopia’s Telecom Sector Sustain Growth Amid Rising Costs?

Both Ethio Telecom and Safaricom Ethiopia’s decisions to raise tariffs come at a crucial juncture as the operators navigate macroeconomic headwinds. With Ethiopia’s telecom market representing vast untapped potential, the ability to balance growth investments, operational costs, and consumer affordability will determine the industry’s future trajectory.

Can Ethiopia’s telecom operators sustain their momentum in the face of rising costs? Share your thoughts in the comments below.