By Benadeta Mwaura - Reporter
Ethipia, May 13, 2026 - Safaricom has increased its stake in its Ethiopian subsidiary to 54.1 percent, deepening its control in what remains one of its most ambitious, and capital-intensive, expansion bets.
The increase follows a fresh round of funding that saw the telco inject Sh21.3 billion ($165 million) into the business over the past year, pushing its shareholding up from 51.67 percent in March 2025. This additional investment underscores Safaricom’s long-term commitment to the Ethiopian market, even as the venture continues to demand heavy capital outlays.
The latest funding round was largely driven by the Safaricom and Vodacom group, resulting in a dilution of minority investors including Sumitomo, British International Investment and the International Finance Corporation.
This shift effectively consolidates control within the core telecom partners, positioning Safaricom to retain a larger share of future earnings once the business turns profitable.
Total funding into the Ethiopian unit has now risen to Sh341.7 billion ($2.64 billion), highlighting the scale of investment required to compete in a liberalising but still challenging market. Safaricom’s own cumulative contribution stands at Sh158 billion, reflecting the financial weight it is carrying in the expansion.
Part of the new capital has been directed toward stabilising the subsidiary’s balance sheet, including clearing deferred vendor payments and securing additional debt facilities to support operations.
The company has also tapped into local borrowing in Ethiopia as part of efforts to optimise its financing structure and reduce reliance on equity.
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The higher stake signals confidence that the Ethiopian unit is edging closer to profitability, a milestone investors have been closely watching since Safaricom entered the market in 2022. With over 10 million customers already onboarded, the operation is gradually gaining traction in a country that was, until recently, a telecom monopoly.
However, the journey has not been without challenges. Ethiopia’s operating environment has been marked by regulatory complexities, infrastructure gaps, and high rollout costs, all of which have slowed the pace of returns.
The need for continued funding also reflects the reality that breaking into a new market, especially one as large and underpenetrated as Ethiopia, requires sustained financial commitment before profitability can be realised.
Still, the strategic logic remains compelling. Ethiopia, with a population of over 120 million people, represents one of Africa’s largest untapped telecom markets. For Safaricom, success there could unlock a new growth frontier beyond its dominant Kenyan base, where market saturation is increasingly limiting expansion.
By increasing its stake, Safaricom is not just investing more capital, it is doubling down on a long-term vision. The move positions the company to capture more value from Ethiopia if the bet pays off, while also exposing it to greater risk if the path to profitability takes longer than expected.
In essence, this is a high-stakes play: one that could redefine Safaricom’s future as a regional telecom powerhouse, or test the limits of its expansion strategy in one of Africa’s most complex markets.