Wednesday, February 8, 2023
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BusinessSharing infrastructure with Safaricom earns ethio telecom 743.6 mln birr

Sharing infrastructure with Safaricom earns ethio telecom 743.6 mln birr

Ethio telecom’s infrastructure sharing agreement with the new telecom provider, Safaricom Ethiopia, has brought 743.6 million birr in revenue for the state giant during the first half of the current fiscal year.

It is a new source of revenue for the state-owned telecom company, which is being privatized. Safaricom, a new entrant, has been utilizing portions of Ethio telecom’s infrastructure following a lengthy discussion due to a dispute over payment terms.

Following mediation that was led by the Ethiopian Communications Authority, a disagreement that had transpired between the two operators (ethio telecom and Safaricom Ethiopia) regarding the price and currency for payments in the infrastructure sharing plan was finally addressed.

The prohibition on foreign developers building telecom infrastructure and leasing it to domestic operators gave ethio telecom market leverage. Safaricom, its rival, has expanded its presence to 24 cities. There was concern that ethio telecom’s revenue would drop owing to the presence of competition in the market, yet the telecom provider still managed to make a record-high profit.

The telecom operator raked in a total of 33.8 billion birr in revenue during the course of the first half of the year, which is equivalent to 96 percent of its target. Income from infrastructure sharing accounted for 2.2 percent of its total revenue.

As the telecom industry in Ethiopia formally opened for business at the beginning of the current fiscal year, Frehiwot Tamiru, the Chief Executive Officer of ethio telecom, cited her company’s first-half performance as a significant accomplishment.

The state-owned telecom business has 70 million subscribers and earned 33.8 billion birr in the first six months of the current fiscal year.

The digital financial services channel, telebirr, has more than 27.2 million clients, and it has generated a total of 82.5 million birr in revenue while conducting a total of 166.1 billion birr worth of transactions in the economy over the past six months, according to Frehiwot.

In December, ethio telecom leveled accusations against Safaricom Ethiopia, claiming that the latter was responsible for severe damage to its international communication line that runs through Djibouti as well as its service lines in the Afar region as a result of construction work that was being done on the line.

In a post that was published on the official social media platform that the company maintains, ethio telecom stated that “for the harassment, interruption of service, and loss suffered by our honorable customers, we declare that we will hold the parties who committed the act without prior warning accountable by law.”

During the course of her presentation of the report, Frehiwot explained that ethio telecom has worked with Safaricom both as a partner and as a competitor. “We have never engaged in anti-competitive behavior; when it comes from a rival, we alert the regulating body.” “We have never engaged in anti-competitive behavior.”

The state-owned telecommunications provider has already initiated the legal process for the interruption of service in the Afar region. Nevertheless, the CEO refrained from providing further information about the issue.

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