Safaricom Ethiopia lost KES 434.4 million at EBITDA in the six months to 30th September 2026. A year earlier that loss was KES 12.56 billion. EBITDA leaves out interest, tax and the cost of the network wearing out, so it roughly shows whether revenue covers operating costs.
Safaricom has promised to break even on that measure by March 2027, and its half-year results put it close. About 69% of that improvement came from smaller currency losses, though. Much of that is a calmer birr, and part of it looks like Safaricom owing its equipment suppliers less.
The business did get better too. On our arithmetic, before those currency losses, it’s already covering its operating costs.
What the birr did
Safaricom Ethiopia earns in birr, Ethiopia’s currency. Part of what it owes is in foreign currency, and those balances get restated when exchange rates move. So when the birr falls, the same amount takes more birr to pay, and the difference shows up as a foreign exchange loss. Safaricom doesn’t itemise these balances, and this loss figure leaves out currency moves on loans and cash.
In the six months to September 2025, the birr fell 16.9% against the dollar and 33% against the euro, and Safaricom Ethiopia booked KES 9.39 billion in foreign exchange losses. In the same six months this year it fell 4.3% and 2.6%, and those losses came to KES 1.07 billion. That KES 8.33 billion gap is about 69% of the KES 12.12 billion improvement at EBITDA.
Safaricom has also cut what’s exposed to this loss. What it owes equipment suppliers on deferred terms fell from USD 148 million to USD 40 million in the year, or from about KES 19.2 billion to about KES 5.2 billion. Its foreign currency loans rose from USD 200 million to USD 311 million, or about KES 26 billion to about KES 40.4 billion, but currency moves on those fall outside it. That’s all at KES 129.87 to the dollar, the rate on 5th November.
Take those losses out of both years and, on our arithmetic, Safaricom Ethiopia went from losing KES 3.16 billion to making KES 634 million. So if the birr stays calm, the March target looks well within reach. Safaricom itself says the pace of getting there depends partly on pricing and exchange rates.
Break-even line
The birr fell hard, and currency losses took most of the EBITDA loss.
“Before those losses” is our arithmetic. Source: Safaricom.
Where the business improved
Service revenue, what customers pay for services, not counting phone sales, rose 71.6% to KES 10.6 billion. In birr it rose 102.1% to ETB 13.14 billion. The shilling figure is lower because the birr also lost value against the shilling, from an average of KES 0.96 to KES 0.81.
Part of that is more customers, with 12.2 million active in the last 30 days, up 43.4%. They also paid more. Safaricom Ethiopia raised tariffs in December 2025, which helped lift the average GB to ETB 24.4, up 31.3%. Customers used more anyway, 7.7 GB a month against about 6.7 GB a year earlier.
Even after those rises, data is much cheaper there than here. ETB 24.4 is about KES 19.70 at Safaricom’s average rate, against about KES 51.50 per GB in Kenya. Safaricom may want to go higher, since its presentation lists “Delayed implementation of cost-based retail pricing” as a headwind.
Customer growth is slowing, though. Three-month active customers reached 15.43 million in September, a rise of about 730,000 in the quarter, down from 1.1 million the quarter before.
Costs helped too. Direct costs such as airtime commissions rose about 54% in birr, far slower than revenue, so the share of revenue left after direct costs and credit losses went from 44% to 57.9%. Other operating costs, leaving out those currency losses, rose 14.8% in birr. Capital spending, the money that goes into the network and IT systems, fell 47.2% to KES 5 billion, and the network still grew to 3,624 sites, up from 3,504 in March.
In September we wrote that no 5G was running on Safaricom’s Ethiopian network. That needs correcting. The new presentation says it has launched 5G fixed wireless access, home internet over the mobile network, in Addis Ababa. It gives no date or site count, and the results booklet’s base station count is still labelled 2G/3G/4G.
Revenue doubled because more people paid more and used more.
Six months to September 2026 against a year earlier. Source: Safaricom.
M-PESA lost active users in the quarter
M-PESA Ethiopia is where the numbers look weakest. Its three-month active users fell from 5.69 million in June to 5.18 million in September, and its one-month active users fell from 2.58 million to 2.15 million. Both are still above a year earlier, at 3.35 million and 1.91 million, but the one-month count has now fallen two quarters running, from 2.69 million in March. Safaricom doesn’t say why.
Those still on it are moving more. Value rose from KES 16 billion in the June quarter to about KES 18.4 billion in the September quarter, and one-month active merchants went from 89,877 to 108,970.
M-PESA’s own revenue barely registers yet. It was KES 10.1 million in six months, on a licence the consortium behind Safaricom Ethiopia bought for USD 150 million, or about KES 19.5 billion. Some of the benefit does land elsewhere, since Safaricom says recharging through M-PESA and banks is cutting its reliance on physical channels.
Revenue is modest, Safaricom says, because the ecosystem is at an early stage. EthSwitch, the national payment switch, enforces interoperability, so the model leans on merchants and QR payments, not person-to-person transfers and wallet balances as in Kenya. Even so, Safaricom’s presentation lists “M-PESA interoperability and telecom-agnostic access” as unresolved, which suggests M-PESA’s own wallet remains largely tied to Safaricom lines.
Peter Ndegwa, Safaricom’s CEO, says consumer adoption is linked to the size of Safaricom’s own customer base. Its rival Ethio Telecom had 72.09 million active mobile subscribers at June 2026. So we wouldn’t expect M-PESA to carry Ethiopia to a profit soon.
What break-even won’t fix
Break-even at EBITDA means revenue covers operating costs. It doesn’t cover the network, site leases or the debt. Once you add network wear, KES 4.92 billion in net finance costs and tax, Safaricom Ethiopia lost KES 16.6 billion in the half, and Safaricom’s share was KES 8.8 billion. Operating free cash flow, the cash left after running costs and capital spending, was minus KES 10.9 billion.
Safaricom kept its full-year target for the operating loss, which is the EBITDA loss plus that network wear, at KES 12 billion to KES 15 billion. That’s before leftover accounting charges from when Ethiopia counted as a high-inflation economy. On that basis the first half came to about KES 7.93 billion, so the second half has to come in at about KES 4.1 billion to KES 7.1 billion. It was about KES 9.9 billion in the second half of last year.
The outside risks are mixed. Inflation reached 14.9% in September, up from 9.4% in March. May’s presentation described a “Stable security situation in Tigray, Amhara & Oromia regions during the year under review”. This one lists “Renewed conflict in Tigray”, though it calls the environment “Broadly Stable” and says “Elections concluded peacefully”.
We think Safaricom will reach EBITDA break-even by March if the birr holds. For Safaricom’s shareholders, that’s still a long way from paying back what’s gone in. Safaricom PLC has put in another USD 42 million, about KES 5.5 billion, since March, which takes its total to USD 1.265 billion, or about KES 164 billion at this week’s rate.
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