Ethiopia's Telecom Awakening: Safaricom Ethiopia, Ethio Telecom & the 120M-User Opportunity

What This Means for Decision-Makers

• →Ethio Telecom retains 90%+ subscriber share (78M vs Safaricom's 8.5M) — but the story is Safaricom's aggressive investment. Safaricom Ethiopia has spent $1.5B+ since launch (2022), building 4,200+ tower sites and achieving 25% population coverage in just 3 years. The company is burning cash (operating losses of ETB 18B in FY2025) but parent Safaricom PLC views Ethiopia as a generational bet — replicating the M-Pesa playbook in a market with 70M unbanked adults. Ethio Telecom's partial privatisation (39% stake sold to a Safaricom-led consortium was cancelled; the government retains 100%) creates strategic uncertainty. 5G launched in Addis Ababa (Q3 2025) by Ethio Telecom, covering the business district and universities — Safaricom plans 5G by late 2026. Source: ECA, Safaricom Ethiopia, Ethio Telecom
• →Ethiopia's digital divide is stark — 35% of mobile users are still on 2G networks, and 18% of the population (22M people) have no mobile access at all. Smartphone penetration is just 22% (vs 52% SSA average), meaning voice calls and USSD remain the primary interface. The mobile money opportunity is enormous but blocked: Ethiopia's National Bank has not yet granted mobile money licenses to telecom operators (Safaricom's M-Pesa application has been pending since 2022). If approved, Ethiopia would become M-Pesa's largest addressable market — 70M+ unbanked adults with no formal financial access. The Telebirr mobile money platform (Ethio Telecom, government-backed, launched 2021) has reached 42M registrations but only 12M active users, suggesting infrastructure readiness but limited merchant adoption. Source: ECA, GSMA, BNE, Safaricom
• →Ethiopia lags Kenya by 10–15 years in telecom development — but that gap represents Africa's largest greenfield opportunity. Kenya's 91% mobile penetration took 20 years of competition (4 operators); Ethiopia has had competition for just 3 years with 2 operators. The 55M unconnected Ethiopians represent more potential subscribers than the entire population of Kenya. Tanzania offers a closer comparison: it had similar penetration levels (48%) when competition intensified in 2010–2015, then reached 82% by 2025 — a trajectory Ethiopia could replicate. The M-Pesa license decision is the single biggest catalyst: if granted, it could drive inclusion from 31% to 60%+ within 5 years, mirroring Kenya's 2008–2014 transformation. Source: GSMA, ITU, ECA, CAK
• →Ethiopia will add 35M+ new mobile subscribers by 2031 — equivalent to adding the entire population of Morocco to the network. Safaricom's strategy is to replicate Kenya's M-Pesa miracle: once licensed, mobile money could reach 50M wallets within 5 years, transforming financial inclusion from 31% to 65%+. The $30 smartphone revolution (Transsion/Tecno devices, locally assembled) will push smartphone penetration from 22% to 45% by 2030. A third operator license (possibly a consortium involving MTN, Airtel, or Axiata) is increasingly likely by 2028 as the government seeks to accelerate competition. The risks: political instability (Tigray conflict aftermath), forex shortages (impacting equipment imports), and regulatory uncertainty around mobile money licensing. If Ethiopia gets it right, it becomes Africa's last great telecom growth story — a $5B+ revenue market by 2031. Source: GSMA, ECA, World Bank, Safaricom PLC, ITU