Wednesday, May 22, 2024
BusinessNew law allows ethio telecom go global

New law allows ethio telecom go global

The new establishment regulation of ethio telecom approved by the Council of Ministers two weeks ago allows the company to invest in the international market, the telecom giant announced in a press briefing held at Hyatt Regency Hotel on January 21, 2020.

The new establishment regulation gives ethio telecom the right to engage in different sectors in the global market, besides allowing it to invest in the mobile banking sector locally, and provide digital finance services.

During the press briefing, the telecom giant commended the actions of the federal government in widening its scope of investment which was limited to the telecom sector.

“The regulation will boost our capacity and expand our reach both locally and internationally,” said Frehiwot Tamiru, CEO of ethio telecom.  

The regulation also increased ethio telecom’s paid-up capital from 40 billion Birr (USD one billion based on current market price) to 400 billion Birr (USD 10 billion) making it the most capitalized state-owned enterprise in Ethiopia. The decision was made just after the company’s asset valuation work was finalized.

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“There has been unmatched growth of our assets and paid-up capital. Our total assets grew by 42 percent using IFRS reporting standard, while our paid-up capital remained unchanged at 40 billion Birr before the regulation came into effect,” Frehiwot said.

ethio telecom, which is currently running projects on infrastructure and system capacity development, is also under preparation to launch mobile banking services within a short period of time.

“We want to provide mobile banking services as long as our telecom infrastructure permits,” said Frehiwot, while disclosing the decision not to outsource future mobile money services to third parties. “We may consider partnerships after utilizing our full potential.”

The telecom provider, which aspires to become a preferred telecom operator among customers and partners in Ethiopia, also declared revenues of 25.5 billion Birr in the first half of the existing financial year, achieving 95 percent of its target. The revenue marks a 12.3 percent increase compared to those of the same period last year.

While mobile voice contributes to almost half of the company’s revenues, data and internet contributes 26 percent and the rest comes from international business, value added services and other sources. Commercializing new streams of revenues, ethio telecom has also generated USD 80.2 million in forex during the first six months of 2020/21 financial year.

With 50.7 million subscribers and a geographic coverage of 85.4 percent, the telecom provider last week, invited telecom providers that are bidding to acquire a license in Ethiopia to share its infrastructure. So far, Orange, MTN and Safaricom have showed an interest to lease ethio telecom assets and are discussing possible business models and arrangements on how to do so. 

“We want to benefit more from leasing our telecom infrastructure. We must diversify our source of income that mostly comes from voice call and internet,” Frehiwot said.

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