Ethiopia’s Era of Ultra-Cheap Mobile Data Meets Economic Reality

After several years of declining data prices, the market is entering a tougher phase. Currency pressure, rising operational costs, and the financial burden of nationwide network expansion are forcing operators to rethink pricing strategies that once prioritised rapid adoption and inclusion.

Safaricom’s Sharp Price Reset Draws Public Attention

Safaricom Ethiopia’s move has triggered the loudest reaction. The operator announced an average increase of 44 per cent on mobile data prices, marking its most significant pricing shift since entering the Ethiopian market two years ago.

The company has positioned the change as a necessary step toward long-term financial sustainability. Still, the announcement has been met with widespread criticism, particularly from students, freelancers, and small businesses whose work depends heavily on affordable mobile Internet access.

For many users, the increase feels abrupt in a market that had grown accustomed to steadily falling data costs.

Currency Devaluation Hits Telecom Economics Hard

A major driver behind the pricing adjustments is Ethiopia’s decision to allow the birr to float freely in mid-2024. The move led to a sharp depreciation of the currency, significantly increasing costs for companies with dollar-linked expenses.

Safaricom has been especially exposed. While it earns revenue in birr, a substantial portion of its costs are denominated in foreign currency. According to the company, roughly 85 per cent of its capital expenditure and about half of its operating expenses are tied to the dollar.

This mismatch has intensified financial pressure at a time when the company is still investing heavily in network rollout and customer acquisition.

Ethio Telecom has taken a different tone in communicating its own tariff adjustments. The state-owned operator says its changes are limited and designed to shield low-income users from the impact.

The company has kept many commonly used low-value data bundles unchanged, including packages priced at ETB 1, ETB 2, and ETB 5. It has also preserved special data offers for students, teachers, and people with disabilities.

In addition, Ethio Telecom increased discounts on data purchased through its telebirr platform to 20 per cent, signalling an effort to soften the impact of broader pricing pressures.

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Affordability Gains Now Under Scrutiny

The diverging strategies have reignited debate over affordability. Over the past six years, Ethiopia’s entry-level mobile broadband prices fell significantly, bringing them close to global affordability benchmarks relative to income levels.

Much of that progress was driven by Ethio Telecom’s earlier tariff reductions, which helped expand access and accelerate digital inclusion. As a result, even modest price increases now feel especially sensitive to consumers who have come to rely on mobile data for education, work, and commerce.

Sustainability Versus Access in a Reforming Market

Despite public pushback, operators argue that economic realities can no longer be ignored. Safaricom reports that losses in Ethiopia are narrowing and says it plans to break even by March 2027, after growing its subscriber base to 11.1 million users.

Ethio Telecom, with approximately 86 million subscribers, remains the foundation of Ethiopia’s digital economy. Together, both operators face the same strategic dilemma: how to fund expansion and maintain service quality without reversing hard-won gains in affordability.

For policymakers and consumers, the current moment marks a turning point. As telecom reform deepens and economic pressures mount, Ethiopia’s challenge will be finding a balance between sustainable operators and inclusive access in a far less forgiving environment.