As the new year begins, Ethiopian mobile users face higher data costs, attributed to the struggling economy, as both Ethio Telecom and Safaricom Ethiopia implement tariff hikes. The telecom operators cite factors such as a depreciating birr, escalating expenses, and the high costs of expanding and maintaining their networks. This change marks a challenging turn for a market that had previously benefited from declining data prices.
The most notable change comes from Safaricom Ethiopia, which announced an average 44% increase in mobile data prices—the company’s most significant adjustment since entering the Ethiopian market two years ago. The company justifies this adjustment as necessary for long-term sustainability. However, it has sparked considerable backlash, especially among students, freelancers, and small businesses that heavily depend on mobile internet access.
The price hikes are primarily a consequence of Ethiopia’s decision to allow the birr to float freely starting in mid-2024, which led to significant depreciation. This development has adversely impacted telecom operators, particularly Safaricom, which earns revenue in birr but incurs many costs in dollars. Approximately 85% of Safaricom’s capital expenses and around half of its operational costs are tied to foreign currencies.
On the other hand, Ethio Telecom has characterised its price adjustments as conservative and protective. The state-owned provider maintains that numerous popular low-cost data bundles, including those priced at ETB 1, ETB 2, and ETB 5, remain unchanged. Additionally, special packages for students, teachers, and individuals with disabilities have not seen price increases, and there is now a 20% discount on data purchases made via telebirr.
This pricing contrast has intensified discussions about affordability in the telecom sector. Industry data indicate that mobile broadband prices in Ethiopia have dropped significantly over the past six years, aligning closely with global affordability standards based on income levels, largely due to previous tariff reductions by Ethio Telecom. This advancement fostered greater access and digital inclusion, making any subsequent price hikes particularly sensitive.
Nonetheless, operators argue that the current economic reality is catching up with them. Safaricom reports a reduction in losses within the Ethiopian market and aims to achieve profitability by March 2027, having expanded its customer base to 11.1 million users. Ethio Telecom, with approximately 86 million subscribers, remains a key player in Ethiopia’s digital landscape. Both policymakers and consumers now face the challenge of balancing sustaining telecom operations with maintaining affordability as the sector undergoes significant reform.
