The East African mobile payment giant trapped in the government's iron curtain and the abyss of black industry

Author: Sleepy.txt, Dongcha Beating

In China, mobile payment is a revolution about "convenience." Whether in bustling cities or remote villages, blue and green QR codes turn our phones into digital wallets. In our perception, mobile operators (China Mobile, China Telecom, China Unicom) are defined merely as "traffic pipelines," while the real financial and payment game occurs between the two giants, Ant Group and Tencent.

But if you cross the Indian Ocean and step onto the red soil of East Africa, this business logic will be instantly crushed.

Here, operators are not just pipelines; they are banks themselves; SIM cards are not communication credentials; they are bank cards. Whoever controls the communication network controls the financial lifeline of a country. It is this "lifeline-level" temptation that has led to an extremely brutal hunting ground.

In December 2025, the African mobile payment giant M-Pesa was personally blocked by the "national team" in Ethiopia.

To break the traffic islands between operators, M-Pesa launched an ambitious all-network product—"M-PESA LeHulum." In the local language, "LeHulum" means "for everyone." This was originally an experiment with a strong financial inclusion flavor, as M-Pesa hoped to allow every Ethiopian with a mobile phone number to transfer money and make payments freely.

However, this product only lasted a few days.

Less than a week after its launch, Ethiopia's telecom giant—state-owned Ethio Telecom—personally intervened and blocked M-PESA's mobile data access. In the face of absolute administrative will, no matter how sophisticated the business logic, it cannot withstand the severed internet connection.

Why does the "national team" go so far as to bear the blame for stifling innovation and take harsh measures against foreign giants?

The answer lies in that set of dominating data: Ethio Telecom, the "crown prince" of Ethiopia, and its payment platform Telebirr, are an unshakable behemoth. It boasts 54.8 million users, controlling nearly 90% of the market share in the country, with an annual transaction volume reaching 43 billion dollars.

For such a company, when M-Pesa attempts to bypass barriers to connect all users, it no longer sees a competitor but a predator trying to infiltrate the national treasury and touch the financial lifeline.

In the business world, data can sometimes lie, but the contrast that deviates from common sense often points to the truth.

Looking at the user numbers, Safaricom's entry into the Ethiopian market seems like a great success. In just one year, the user base surged by 83.7%, crossing the 11.1 million threshold. However, on the other end of the financial statements, M-Pesa's payment revenue plummeted by 45.6% year-on-year.

This contrast reveals the brutal truth behind the iron curtain: users can only treat foreign operators as a cheap internet card to exploit, while businesses involving custody and clearing will still be firmly held in the hands of the "national team."

Ethiopia Under the Iron Curtain

In July 2025, a report by the World Bank titled "Ethiopia Telecom Market Assessment" tore away the last veil of shame from the local market.

Under the objective statements of this report, the Kenyan giant Safaricom appears like a hunter entering a primeval forest, mistakenly believing it has advanced weapons, unaware that it has already fallen into a carefully designed trap.

The first trap is the "ticket." To obtain this entry pass to Africa's second-largest population country, Safaricom paid a staggering 1 billion dollars in licensing fees for 15 years of operational rights and a mobile payment license.

This means that even if the company sells not a single data package, it must bear a fixed amortization cost of about 66.7 million dollars each year. In contrast, the state-owned competitor Ethio Telecom incurred zero costs to obtain the same license.

The second trap is the settlement mechanism known as MTR (Mobile Termination Rate). The logic of this mechanism is simple: when a user from Company A calls a user from Company B, Company A must pay a toll to Company B. Since Safaricom is a new player, almost every call made by its users is a tribute to Ethio Telecom.

According to estimates by the World Bank, just this one item costs Safaricom nearly 20 million dollars annually in net payments to its largest competitor. Additionally, due to the lack of independent third-party tower companies in Ethiopia, Safaricom has to rent base stations and fiber optics from Ethio Telecom to lay its own network, turning their commercial competition into a comical parasitic relationship: every new user Safaricom develops, every kilometer of fiber it lays, is a blood transfusion to its biggest competitor.

Even with such heavy shackles, Safaricom still managed to break through with superior service, surpassing the 10 million user mark. As the "soft knife" failed to exhaust its opponent, the Ethiopian side began to use administrative means for a dimensional reduction attack.

In the tax segment, the government mandated that all transactions involving the government must be prioritized through Telebirr. As a major taxpayer, when Safaricom went to pay taxes to the government, it was even required to use the competitor Telebirr's payment system.

In the data price war, Ethio Telecom lowered data prices to about 0.16 dollars/GB, nearly 40% lower than the African average (0.25 dollars/GB).

The World Bank characterized this strategy as "predatory pricing," which uses the monopoly position and loss-bearing capacity of state-owned enterprises to deliberately set prices below the cost line, squeezing cash-strapped competitors out of the market.

In December 2025, when M-Pesa attempted to make a final breakthrough through the LeHulum application, Ethio Telecom finally lost its last patience. It stopped beating around the bush and stopped following the rules. The severed internet connection became the end of this years-long hunting game.

Why is the Ethiopian government so aggressive, even willing to tear up global commitments to telecom liberalization?

On the power chessboard in Addis Ababa, mobile payment has never been a multiple-choice question about "convenience." The core lies in two words: foreign exchange and surveillance.

Ethiopia sees as much as 6 billion dollars in remittances flowing in through underground channels each year, with Hawala being the most troubling for the government. This ancient underground banking system, prevalent in the Middle East and Africa, does not rely on banks but on interpersonal credit, completely bypassing regulatory radars.

For the Ethiopian government, which is extremely short on foreign exchange, Telebirr is not just a wallet; it is a "financial trap." The government urgently needs to use this official channel to reclaim every dollar scattered among the people.

An even more secret ambition lies in central bank digital currency (CBDC). In the government's grand vision, Telebirr, with its 54.8 million users, will be the only legal outlet for the future issuance of digital fiat currency. In the logic of power, financial infrastructure must be in its own hands, and no foreign capital is allowed to touch the country's credit foundation.

However, does this "absolute sense of security" built under the iron curtain truly bring prosperity?

In July 2024, Ethiopia implemented currency reform, causing the local currency exchange rate to plummet nearly threefold. Ethio Telecom, burdened with massive dollar debts to suppliers like Huawei and ZTE, saw its foreign exchange losses soar from 3 billion birr to 42 billion birr, an increase of 1825%, leading to a 70% drop in after-tax profits.

This is the true face behind the iron curtain: the government stifled competition for a sense of security, foreign capital bled under unfair rules, and state-owned enterprises were severely injured in the currency storm. For ordinary users, they have no choice but to continue using the designated applications.

The Tragedy of Freedom in Kenya

If Ethiopia's iron curtain is suffocating, will neighboring Kenya, which practices a free market, be a promised land for business? After all, this is the hometown of M-Pesa, its most proud stronghold.

Here, M-Pesa does not face any administrative blockades. It occupies 90% of the market share, and nearly 60% of Kenya's GDP flows through this network. It is not just a payment tool; it is the water, electricity, and gas of the country's financial system.

But when regulation is long absent, this absolute freedom ultimately devolves into absolute chaos. The pipeline that M-Pesa originally built for inclusive finance has now become an uncontrolled highway for crime.

The first to speed down this highway is gambling. In Kenya, gambling is a tacitly accepted money-guzzling beast, and M-Pesa is its largest funding channel, with as much as 1.5 billion dollars (169.1 billion Kenyan shillings) flowing into the gambling network each year.

The Kenyan government heavily relies on the massive tax revenue provided by the gambling industry, thus turning a blind eye to the source of funds, making M-Pesa a paradise for criminals. The government collects taxes, gambling companies make money, and M-Pesa takes the fees. In this perfect commercial closed loop, only public safety pays the price.

Even more frightening than money laundering is the rampant fraud. In 2024, M-Pesa-related fraud losses surged by 344% year-on-year. M-Pesa has 30 million users in this country, with over 80% of them having been targeted by fraud rings.

Moreover, the methods of deception have undergone several iterations; they are no longer satisfied with stealing the balance in your wallet but directly impersonate your identity to take out loans.

The most typical case is the attack on the loan service launched by Safaricom. Criminal gangs illegally obtained 123,000 SIM cards and exploited M-Pesa's credit loopholes to apply for overdraft loans on a large scale, instantly absconding with millions of dollars.

Why can criminals so precisely pass identity verification? The answer points to Safaricom's internal operations.

In 2024, the company fired 113 employees in one go for participating in fraud. Those who held user privacy data and had backend access were becoming key links in the black industrial chain; any sophisticated technological firewall is as thin as a cicada's wing in the face of human greed.

Common Underground Roots

When we try to explain Ethiopia's iron curtain and Kenya's abyss with civilized business logic, we often overlook the deeper, more disturbing world beneath the surface.

Technology is neutral, but human nature is not.

In the Tigray region of northern Ethiopia, illegal gold mines are expanding like a tumor across the wasteland. Investigations reveal that in those vast mining areas visible even to satellites, legal order has long been pushed aside, replaced by a violent network woven by mysterious foreign investors and local armed groups.

Mysterious "foreign investors" provide millions of dollars in funding to purchase heavy excavation equipment; local military forces are responsible for guarding checkpoints, turning the mining areas into independent territories.

Every day, thousands of miners work under the threat of guns, and the gold they extract does not enter the central bank's vault but flows continuously through military-controlled smuggling routes to Sudan or the UAE, turning into billions of dollars of dirty money.

Thanks to the convenience of mobile payments—split, instant, low-cost, and multi-point collection—huge smuggling funds are broken down into smaller amounts, quietly flowing back. Under the temptation of gold prices exceeding 4,000 dollars per ounce, so-called inclusive finance ultimately became the most efficient harvesting tool for illegal mineral monetization.

Even harder to trace than gold is cash. Ethiopia sees as much as 6 billion