Ethio telecom’s digital expansion reflects broader transformation in Africa’s second-most populous nation
By Napoleon Mugenzi
Ethiopia’s sole telecoms operator reported a 46.8% surge in mobile data traffic in the six months to December 2025, underscoring the rapid digitalisation of a country that until recently maintained one of Africa’s most restrictive communications sectors.
Ethio telecom, which retains a monopoly on fixed-line services despite partial market liberalisation, added 278 mobile base stations between July and December 2025, extending coverage to more than 760,000 people in previously unconnected rural areas. The expansion brought the state-owned operator’s network to over 10,000 sites nationwide, with 4G services now available in more than 1,000 towns covering roughly three-quarters of Ethiopia’s 126m population.
The infrastructure push forms part of the company’s alignment with Digital Ethiopia 2030, the government’s blueprint for economic modernisation through technology adoption. Ethio telecom laid 378 kilometres of fibre-optic cable during the period, bringing total backbone infrastructure to 23,000km, while international gateway capacity reached 3 terabits per second following a 500-gigabit expansion.
Mobile data consumption exceeded 940bn megabytes over the half-year, dwarfing the 10% growth in voice traffic. The shift mirrors patterns across sub-Saharan Africa, where smartphone penetration and cheaper devices are driving demand for video streaming, social media and messaging applications that bypass traditional voice and SMS services.
Ethio telecom’s customer base grew 8.1% year-on-year to 87.1m subscribers by December, with mobile data users reaching 49m. Revenue climbed 37% to 85bn birr (£462m at official rates), though the company acknowledged this fell short of internal targets. Earnings before interest, tax, depreciation and amortisation stood at 42.4bn birr, yielding a gross margin approaching 50%.
The operator’s telebirr mobile money platform registered 58.6m users (two-thirds of the subscriber base) and processed nearly 2trn birr in transfers during the six-month period. The service, integrated with 30 commercial banks, has become central to Ethiopia’s financial inclusion drive in a country where formal banking remains limited outside major urban centres. Millions of Ethiopians now access micro-loans and digital savings products through the platform, which has effectively become national payments infrastructure.
Beyond connectivity, Ethio telecom generated 3.4bn birr from enterprise services including cloud computing and data centres, reflecting demand from government agencies pursuing digitisation programmes. The company supported registration of 22m citizens (roughly 69% of enrollments) in Ethiopia’s national digital identity scheme, positioning itself as an implementation partner in state-led technology initiatives.
The expansion comes amid persistent operational constraints. Foreign currency shortages complicate equipment procurement, while power cuts, infrastructure vandalism and cybersecurity threats disrupt service delivery. Ethio telecom cited cost efficiencies totalling 4bn birr as essential to maintaining margins.
The company also signalled regional ambitions through partnerships with operators including Cameroon Telecommunications, suggesting intent to evolve beyond its domestic monopoly. Such aspirations face formidable obstacles: Ethiopia’s telecoms sector was opened to limited competition only in 2021, when Kenya’s Safaricom launched operations through a locally licensed subsidiary, ending decades of state exclusivity.
For Addis Ababa, Ethio telecom’s performance offers both encouragement and caution. Rapid digital adoption creates opportunities for economic diversification and service delivery improvements. Yet the dominance of a single state-owned provider in critical infrastructure (from payments to identity systems) concentrates risk in an economy already grappling with macroeconomic instability and foreign exchange scarcity. How Ethiopia balances state control with the competitive pressures necessary to sustain innovation will shape its digital transformation in the years ahead.
