Airtime and data purchases push Safaricom Ethiopia's M-Pesa users to 10.8m
Safaricom Ethiopia, which commenced commercial operations in October 2022, has seen substantial investment from its shareholders.
The number of M-Pesa users on Safaricom Ethiopia's network surged from 3.1 million to 10.8 million in the year ending December 2024, driven by increased usage for airtime and data purchases and the introduction of cross-border money transfer services.
Safaricom Ethiopia launched M-Pesa in August 2023, nearly a year after starting voice and data operations in the country.
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Unlike in Kenya where M-Pesa is mainly used for cash transfers and merchant payments, Ethiopia's customers are primarily using the service for buying airtime and data.
Cash transactions still dominate the Ethiopian market, but mobile operators are looking to expand digital payments, leveraging the country's low banking penetration.
"We have so far registered 10.8 million M-Pesa customers as of the end of December 2024, cumulative since inception. We are continuously assessing suitable use cases to drive higher usage," Safaricom said in an update on its Ethiopian unit for the quarter ending December 2024.
"Currently, we have 20 per cent of airtime top-up being done through M-Pesa."
M-Pesa Global service
To enhance cross-border transactions, Safaricom Kenya extended its M-Pesa Global service to Ethiopia in October 2024, allowing seamless money transfers between the two countries.
Despite the rapid growth in users, revenue from Ethiopia's M-Pesa operations dropped to Sh9.8 million in the nine months to December 2024, down from Sh38.4 million in the same period in 2023.
The decline was partly due to the depreciation of the Ethiopian birr during the period.
The Ethiopian unit has expanded its agent and merchant networks, with the number of merchants rising to 119,500 from 43,100, while agents increased to 29,200 from 24,900 over the past year.
The service has also integrated with multiple banks in Ethiopia, facilitating money transfers between mobile wallets and bank accounts.
Revenue per user
The number of 90-day active customers rose by 64 per cent to 7.1 million, with the average revenue per user increasing by 13 per cent to Sh129.06, from Sh113.89 in December 2023.
The Ethiopia business generated Sh6.74 billion in revenue over the nine months, marking a 40 per cent rise from Sh4.82 billion in the corresponding period in 2023.
Mobile data revenue led this growth, surging 93 per cent to Sh4.83 billion. Voice revenue climbed 28 per cent to Sh870.1 million, while SMS revenue more than doubled to Sh60.6 million.
Safaricom Ethiopia, which commenced commercial operations in October 2022, has seen substantial investment from its shareholders.
By December 2024, the Ethiopian entity had received a total capital contribution of $2.05 billion (Sh246 billion), with Safaricom's share amounting to $1.06 billion (Sh135.27 billion).
This funding includes an $850 million (Sh102.2 billion) license fee and a $150 million (Sh18 billion) M-Pesa license fee.
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