Safaricom Faces Explosive Market Abuse Claims as Ethiopia’s Telecom Giant Threatens Return to Monopoly

Ethiopia’s telecoms liberalisation hangs in the balance after the state-owned incumbent unleashed a blistering attack on Safaricom, accusing the Kenyan operator of flagrant market misconduct and threatening to reverse reforms that ended a century of monopoly control.

In an extraordinary escalation that could reshape the Horn of Africa’s telecoms landscape, Ethio Telecom has warned that continued violations by Safaricom Ethiopia risk forcing authorities to reconsider the competitive framework introduced just three years ago, potentially restoring single-operator dominance in a market of 120 million people.

The bombshell came as Firehiwot Tamiru, who has steered Ethio Telecom for seven years, delivered a scathing rebuke of Safaricom’s operational practices during a results briefing on Thursday, declaring that the competitor’s conduct falls below international standards and amounts to systematic abuse of market regulations.

The explosive row erupted after M-PESA Ethiopia publicly alleged that Ethio Telecom had blocked access to its newly launched Lehulm mobile money platform, preventing users on the state operator’s network from transacting. Safaricom channeled the complaint through its financial services subsidiary, triggering regulatory scrutiny and international attention.

Ethio Telecom has categorically rejected the accusations, insisting it acted only after repeated infractions threatened customer security and critical national infrastructure. The company has demanded a formal apology from Safaricom for making unsubstantiated claims before domestic and international audiences.

The dispute has now escalated into a formal corporate confrontation, with Ethio Telecom’s chief executive dispatching an official letter demanding retraction of the allegations. When Safaricom responded by redirecting the matter to M-PESA Ethiopia, tensions intensified further, with the state operator accusing its rival of attempting to exploit its customer base without proper infrastructure investment.

Tamiru told reporters that verbal warnings had previously been issued to Safaricom over its market behavior, but the infractions continued unchecked, forcing the state operator to take decisive protective measures. Her comments represent the most aggressive public stance Ethio Telecom has taken since the market opened to competition.

The chief executive issued a stark warning that appeared to question the viability of Ethiopia’s duopoly experiment. She insisted there exists no international precedent permitting one operator to commandeer a competitor’s customers without establishing requisite digital systems and infrastructure, suggesting Safaricom had attempted precisely such an overreach.

Her remarks strike at the heart of Ethiopia’s telecoms reform agenda, which saw Safaricom Ethiopia awarded a nationwide license in 2022 after a competitive bidding process that attracted global attention. The Kenyan consortium, which includes Vodafone and Vodacom, paid $850 million for market entry and committed billions more in infrastructure investment.

The liberalisation marked a watershed moment for Ethiopia, ending Ethio Telecom’s stranglehold over fixed line, mobile, internet and international gateway services. For decades, the monopoly structure allowed government to maintain strategic oversight while channeling revenues into public expenditure, but chronic underinvestment and service deficiencies ultimately prompted reform.

Safaricom Ethiopia positioned itself as a catalyst for digital transformation, leveraging M-PESA’s formidable reputation across East Africa to accelerate financial inclusion. The mobile money platform rapidly gained traction, but Thursday’s revelations suggest the expansion has triggered fierce resistance from the entrenched operator.

Tamiru emphasized that digital security remains paramount, declaring that safeguarding customers and critical infrastructure constituted a non-negotiable responsibility. She stressed that Digital Ethiopia must remain safe and secure, implying Safaricom’s approach had jeopardized those objectives.

Although Safaricom subsequently issued an apology, Ethio Telecom’s chief executive made clear the state operator would not share its subscriber base with the competitor. She left the door open for collaboration, but only on terms that respect market regulations and conform to international norms.

The confrontation raises fundamental questions about the sustainability of Ethiopia’s competitive telecoms environment. With Ethio Telecom now explicitly warning that the liberalisation framework could be reconsidered, investors and industry observers face the prospect of a dramatic policy reversal that would eliminate competition barely three years after its introduction.

The standoff also exposes deeper tensions over market conduct in a sector where the state retains overwhelming legacy advantages. Ethio Telecom controls the vast majority of subscribers, infrastructure and distribution channels, while Safaricom struggles to establish equivalent reach despite substantial capital commitments.

Industry analysts warn that any regression to monopoly would deal a devastating blow to Ethiopia’s economic reform credentials and could trigger contractual disputes with Safaricom’s consortium partners. The telecom license represents one of the largest foreign direct investments in Ethiopian history, and its value depends entirely on competitive market access.

For Safaricom, the dispute threatens to tarnish its regional expansion strategy and raises uncomfortable questions about due diligence before entering one of Africa’s most challenging operating environments. The company has staked significant resources and reputation on Ethiopian success, making retreat or failure particularly costly.

The allegations of market abuse, infrastructure deficiencies and regulatory overreach now sit before Ethiopian authorities, who must determine whether Ethio Telecom acted legitimately to protect national interests or wielded incumbent power to frustrate genuine competition. Their verdict will determine whether Ethiopia’s telecoms future remains competitive or reverts to centralized control.