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Ethio Telecom amasses 47.7 bln birr revenue

Ethio Telecom amasses 47.7 bln birr revenue

- Vandalism costs the company direly

- Government bars telecom infrastructure companies

- KPMG completes asset valuation

The national telecom company, Ethio Telecom, has generated 47.7 billion birr revenue in the 2019-2020 fiscal year that ended June30, 2020.

The revenue jumped by 31.4 percent compared to last year. Ethio Telecom, which is preparing itself for competition, has achieved 105.1 percent of its target. Forty nine percent of the revenue was generated from mobile services, 29 percent from data and internet, nine percent from international business, 9.4 percent from value added services and 3.6 from other services.

“This is an outstanding performance,” Ethio Telecom’s chief executive officer Frehiwot Tamru told a press conference on Thursday. The company generated USD 147.7 million from international services, jumped by 50 percent. According to Frehiwot, the revenue generated from international service increased due to the tariff reduction, and measures taken to control illegal telecom operations. However, she said the COVID-19 pandemic adversely affected the foreign currency earner in the second half. “There was no demand for international services like roaming after the spread of the pandemic,” Frehiwot said.

In the year under review, Ethio Telecom paid 11.3 billion birr in tax and four billion birr dividend to the government, the sole owner of the company. The state monopoly serviced 318 million birr loan. “We are paying our debt according to schedule and this helped us improve our working relations with our development partners. Our vendors are now happy and asking us if we need loan for the telecom reform program,” Frehiwot. It is to be recalled that the Chinese telecom giants ZTE and Huawei have undertaken massive telecom infrastructure projects in Ethiopia with vendor financing schemes.

Ethio Telecom’s subscribers have reached 46.2 million of which 44.5 million are mobile voice subscribers. The company has 23.8 million data and internet subscribers, 980,000 fixed service and broadband 212,000 subscribers.

Frehiwot said the demand for data and internet is increasing steadily. “That is a global trend,” she said.

Frehiwot attributed the achievements to the management and staff of the company. “We have a dedicated and committed management and employees who worked hard to realise the strategic plan. The leadership was able to successfully mobilize and the staff,” she said.

Ethio Telecom spent 1.1 billion birr on corporate social responsibilities, the highest amount that the telecom firm allocated for such programs. According to the CEO, the company donated 100 million birr to support COVID-19 response. Frehiowt was proud to announce that Ethio Telecom is financing the scientific research being undertaken on COVID-19 medicines.  “The Ministry of Innovation has requested us USD 600,000 USD for the research and I am proud to announce that we have provided them with the first round of payment. I had a discussion with the minister recently and he told me that the research is bearing fruitful results and it is on the final stage. It is better if you hear the good news from them,” she said.

The company has also financed major government projects such the Addis Ababa City Beautification project, and the Green Legacy Initiative.

The road has not been a bed of roses. Ethio Telecom has faced several challenges that hinder the development agenda that the firm is advancing.

According to Frehiwot, infrastructure vandalism and security vulnerability, commercial power interruption, COVID-19 and telecom fraud were the major challenges facing the company. The company’s annual report indicated that 1,161 infrastructure damages were reported in the year under review, increased by 33 percent compared to last year. Ten security personnel were killed and four sustained physical injuries. 12 were abducted and four vehicles were damaged. “I am sad to report the damages incurred on our company. Ethio Telecom is a public enterprise that is making a significant contribution in the economic development of the country. It has created more than 287,000 jobs. It is involved in several CSR projects. We are buying uniforms for school children. The company is the property of all Ethiopians. I do not understand why we attack a company that provides daily bread for hundred thousands of people,” Frehiwot lamented.

The Ethiopian government is undertaking a radical telecom reform program that aims at liberalizing the telecom market. The Ethiopian Communications Authority is in the process to grant two licenses for international telecom operators. The Ministry of Finance, which is spearheading the telecom reform program, is looking for a strategic partner that would acquire a 40 percent stake on the state monopoly.  

As part of that effort Ethio Telecom has hired the international consulting firm KPMG to conduct asset valuation work. Frehiwot told The Reporter that KPMG has completed the asset evaluation work. “They have presented the first and second report for review. We will reveal the report in about two weeks,” Frehiwot said.

In a related news, the Ethiopian government has decided to deny entry to telecom infrastructure companies. Telecom infrastructure companies that builds and lease telecom towers were vying to enter the Ethiopian market. Several companies have approached Ethiopian authorities.

The management of Ethio Telecom protested the attempt to allow foreign telecom infrastructure firms to cater the service locally. Frehiwot told The Reporter that the government has decided not to license foreign firms. “We have sufficient telecom infrastructure like fiber cables that we can rent to the new entrants. Telecom infrastructure companies will not be allowed to operate here. So new entrants will either use our infrastructure or build their own,” Frehiwot said.              

The 126 year old company has 36,000 employees and 249,000 distributers.