In a move designed to stabilize its volatile expansion and protect the bottom line of its Nairobi-listed parent company, Safaricom Ethiopia has implemented a sweeping increase in mobile data tariffs.
The price adjustment, which sees data packages soar by an average of 44 percent, marks a critical turning point in Safaricom’s quest to break even in Africa’s second-most populous nation. The hike is a direct response to the aggressive depreciation of the Ethiopian Birr, which has severely eroded the value of local revenues when converted to the US dollars used for network investments.
The New Cost of Connectivity
According to reports from BirrMetrics, daily bundles have been hit the hardest. A single gigabyte of data now costs 35 ETB (Sh29), while a 10GB monthly package has been set at 500 ETB (Sh414).
Crucially, the operator has opted to leave Voice and SMS tariffs unchanged for now, focusing instead on data—the segment that currently generates the bulk of its Ethiopian revenue (Sh4.1 billion out of Sh6.18 billion total service revenue).
“The price levels are too low… telecoms like us are selling services below cost, and that must change,” noted Safaricom Plc CFO Dilip Pal, highlighting the sustainability crisis facing the sector.
A “Dollar Investment” vs. a “Birr Revenue”
The primary driver behind this “market repair” is the dramatic collapse of the Ethiopian Birr. Since July 2024, the currency has plummeted from 57 units to the dollar to approximately 146.
This devaluation created a “deeper hole” for Safaricom, which has spent billions of dollars on infrastructure but collects revenue in a weakening local currency. A World Bank report recently warned that Ethiopia’s Average Revenue Per User (ARPU)—currently sitting at a meager $1 (Sh128.99) per month—is among the lowest in Africa, making further network expansion commercially unviable without price corrections.
Impact on the Nairobi Bourse
For investors at the Nairobi Securities Exchange (NSE), the tariff hike is welcome news. Safaricom Plc, which holds a 53.37 percent controlling stake in the Ethiopian unit, has already seen the benefits of its cost-containment strategies.
- Loss Reduction: Ethiopia-related losses dropped by 59 percent in the first half of the current financial year.
- Bottom Line Gain: The net loss attributed to the Ethiopian operation fell to Sh15.2 billion, down from Sh19.4 billion the previous year—a net gain of Sh4.2 billion for the group.
Growth Amidst Turbulence
Despite the economic headwinds, Safaricom’s footprint in Ethiopia is expanding rapidly. The company’s active 90-day customer base surged by 83.7 percent over the last year, reaching 11.15 million as of September 2025.
| Segment | Active Users (Millions) |
| Voice | 9.57 |
| Data | 8.87 |
| M-Pesa | 3.35 |
While the state-owned competitor, EthioTel, still enjoys certain regulatory advantages, Safaricom’s decision to “rationalize” prices suggests the firm is moving away from a strategy of pure subscriber acquisition toward one of long-term financial sustainability.
