Currency Shock, Expansion Costs Push Safaricom Ethiopia Into 42 billion Birr Loss

Nearly four years after Safaricom Ethiopia rolled out its commercial operations, it has registered an operating loss of 42 billion birr in the financial year that ended March. The losses occurred despite the company's increasing revenue by 270% from the last financial year to reach 7.2 billion birr. Safaricom Ethiopia attributed part of the losses to the foreign exchange reforms Ethiopia implemented since July, alongside it still being in the investment stage. 

Ethiopia transitioned from a managed currency regime to a market-based policy at the end of July, resulting in the Birr sliding by 30% against the US dollar on the first day, with a progressive descent over the past eight months. The Birr's value against the US dollar has plummeted from around 57 birr in late July to around 134 since the currency float. Companies that collect funds in Birr while having to settle payments in foreign currency were severely impacted by the initial depreciation of the currency.

“This loss is largely in line with our expectations at this heavy investment stage of the company’s growth, but it also includes the impact of foreign exchange reforms, that we expect to normalize going forward,” Safaricom Ethiopia said in its statement.

Meanwhile, Safaricom acquired 8.8 million 90-day active voice and data customers, marking a 103% year-on-year increase in its active customer base for the period. The Company’s flagship mobile money service Mpesa also registered significant growth with 2.4 million 90-day active customers and facilitating transactions worth 15.8 billion during the reporting period.

Wim Vanhelleputte, CEO of Safaricom Ethiopia pointed to a growing customer base and network coverage as positive developments during the financial year that ended on March 2025.

Safaricom Ethiopia has invested billions of dollars to expand 4G services, now reaching almost 50% of Ethiopia's population through 3,141 strategically deployed sites. The Company competes with the 130-year-old ethiotelecom for market share which had a monopoly over telecommunications in Ethiopia for over a century. The formerly fully state-owned operator managed to pull in over 61 billion birr in the first half of the year. However, all has not been rosy for ethiotelecom either as it managed to sell only just 10.77 million shares from the 100 million ordinary shares issued in the country's first IP0 six months back.

Safaricom entered Ethiopia after paying 850 million dollars for the operator license and has continued to invest heavily in infrastructure since. The Company aims to attain an 85% network coverage in the near term with continued investments.