BY GIRMACHEW GASHAW
Our guest for today is Frehiwot Tamiru, CEO of Ethio Telecom. The hard-working and humble Frehiwot has now been selected as one of African CEOs by the Business Executive, West Africa’s leading magazine covering the economy, business, finance, investment, and socioeconomic development.
Frehiwot is Ethio Telecom’s first female CEO who championed in bringing about various improvements to the company and has continued to apply her profound leadership skills to expand the sector to enable it contribute to Ethiopia’s economy.
Frehiwot was mentioned in Advance Media’s Top 100 Women African CEOs, presenting the most successful women CEOs among 21 African countries that continue to advance their companies in different sectors in Africa and the world. These women were selected based on profit, sustainability, and influence over their sector, industry, & community.
The Business Executive honors African CEOs in various business sectors for contributions to the SDGs. The magazine also hosts a variety of business forums where private businesses and public institutions such as business regulators and facilitators can network and form partnerships and alliances. For her contributions to Ethiopia’s telecom sector, Business Executive has nominated Frehiwot Tamiru for Africa’s Most Respected CEO award in the telecommunications category.
The Ethiopian Herald spent about an hour to learn the achievement and challenges her company has been facing on the way to realize digital Ethiopia. Have a nice read.
First of all, I would like to thank you for your willingness to make this interview possible.
Thank you.
Your company has been striving to ensure digital Ethiopia. Would you explain to us the progresses your company made so far in promoting digital technology in the country?
So far, Ethio telecom has provided basic telecom services. It has built infrastructure of various kinds to make telecom services accessible to the people at large. More recently, with a vision of using the infrastructure built effectively, we are able to create a system that helps accelerate financial services. Tele Birr, for instance, launched just a year ago. Some 21.8 million people have access to the service which is just unprecedented in the history of the telecom industry. Other companies have toiled for about a decade to attain this level. We transacted 30.3 billion Birr as over 21,000 business enterprises are integrated with our company. In short, it creates comfortable situations to transact money easily.
As a nation, apart from expanding telecom infrastructure and/or beyond connectivity, Ethio telecom is striving so as to bring additional services which will add value on service provision. Presently, Tele birr has been transferring and receiving money. As many stakeholders are now participating in the fuel sector, tele-birr is creating a conducive working environment through creating a system that manages fuel compensation at a grass root level.
Tele-birr has also eased the tax collection system. This year, for instance, Level C taxpayers have been paying tax using telebirr service. Vehicle drivers are also able to pay fines for traffic rule violations through telebirr. This means subscribers who previously used their mobile phone for voice and message are obtaining additional services on their mobile.
The 128 year old company, Ethio telecom, is by now the second giant operator in Africa and 26th in the world. We have also stretched network connectivity with 99 percent of population coverage. But the reason to embark upon this service is that beyond connectivity we have to engage in problem-solving services to the society. Tele birr for now is at its infant stage. We have a plan to come up with more services. Especially, we are striving to expand financial service access to those unreached ones. We will introduce this service soon.
We call all the trading companies to use the service. As we see, the cost of living is alarming. Using the limited resource effectively, we put the service in a place where it assists people. When the operation cost increases, it may influence us in paying employees a benefit package. If we are able to replace all channels or manual systems which we provide products and services with digitization, we can minimize our costs, we can use the money for development and gain public satisfaction.
We say digitalization improves productivity, creates new jobs, and develops working systems or other developments considering all these things. That is why we say ethio-telecom is realizing digital Ethiopia. When we apply 5G in some sector especially, the latest technology, we believe that it will have an impact in solving problems of some institutions. As of the new Ethiopian year, we will use digitalization widely in health, mining, agriculture etc identifying various sectors. In terms of creating remote reality in areas where it creates opportunities to intensify productivity, we will intensify the service. Presently, 5G has been realized in Addis Ababa alone.
Apart from bringing new technologies, we have a vision of benefiting the society at large. Companies should understand that there is a technology that eases their working system and uses the technology. We better understood the importance of digitalization at times where COVID influences us. And many institutions understood the significance of digitalization after COVID -19 and this created a window of opportunity to promote digitalization. However, as it is a change of culture, it may take some time. Awareness-raising tasks should be done. If that is so, we are able to expand the technology at the grass root level.
As you said, the Cultural Revolution is coming and how do you evaluate social dependency on digitalization?
It is true. For instance, the fact that Tele-birr’s close to 22 million subscribers is an indication that the society has shown interest. Other countries took a decade to reach the level we are even though the technology readiness now and at that time differs. Gaining such an active customer within a year is a thing that should not be undermined. Twenty two million is a great number. However, it is important to raise the awareness of the society on how to create value for itself. With the integration of many programs in this, using digital technologies will be a necessity. We replicate manual systems because there is no digital service. At times when there is no option of using a manual system, the transaction increases equally. Thus, it is decisive to do awareness raising tasks in a sustainable manner.
That is why we work on digital literacy. In the last fiscal year, we established a digital lab in 65 schools with a view to narrow digital divide. This does not mean that we have done enough as more tasks remain to be done. We have to strengthen the various tasks done with media institutions, schools and other stakeholders in order to upgrade societal knowledge about digitalization. We encourage Institutions to know digitalization and its use in their day to day activities.
This year, we are able to achieve 5.4 billion Birr cost optimization by applying a do-to-save system. Currently, we are running 217 projects. For all programmes, we have allocated capital and operational expenditures. But we have achieved our plan with less operational cost in the just ended budget year —we call this — do to save. It makes us come out of our comfort zone.
It is obvious that your company has made high revenue. How does this achievement come true?
Generally, the performance of 2014 EC is very attractive. We planned to raise the number of subscribers and has managed to increase the revenue. In terms of revenue, we have generated 61.3 billion Birr. In other words, we achieved 88 percent of our plan. The problem created in the northern part of the country has seriously affected the
economy and our customers. Accordingly, 45 percent of our mobile stations, i.e. 3,473 mobile stations are not able to provide service due to the instability.
Apart from achieving success in terms of number, we pay a lot of sacrifices to achieve the target set. In order to rehabilitate war-affected areas, our employees have paid immeasurable sacrifice. At this time, we do not have access to 1,144 stations. At the plan period, we assumed that problems in the north part of the country would be solved shortly. Reversibly, instead of terminating, the northern instability is transcending to other parts of the country thereby many services providing stations are out of service. Within all these challenging situations, we have hit the target we aspired. Considering that it will have a greater impact on our customers, we are creating many options for them. We increased the number of customers to 66.59 million.
In order to ensure customer satisfaction, we provide 144 projects. Out of these, some 67 are new one. Other 37 projects are provided with making certain improvements. These projects have helped us to increase income and customer satisfaction. Some 217 projects are carried out so as to enable the previous projects?. Next generation business support system is one among the projects that consume huge amounts of money. 4G internet expansion has been made in 136 towns. Among other factors, the main reason for the success is the synergy between the management and the employees.
Could you tell us about the contribution of Ethio telecom to the national foreign currency earning?
This year’s revenue is USD 146 million. This is the outcome of existing and new products that we introduced to generate foreign currency. In fact, it is only 82 to 83 percent of our plan, mainly because we have lost the international call service to the northern part of the country. But compared to the overall situation the revenue is not to be underestimated.
Our discussion to receive payment in foreign currency for infrastructure sharing to the new telecom operator is successful. It is not included in the just ended fiscal year because this year we only signed the contract [but the payment] will be earned in the new fiscal year.
The stated amount of foreign currency is the result of newly added products. For instance, telebirr received remittance from 37 countries. But it needs a lot of promotional works to increase the flow of remittance via telebirr. In addition, we just obtained the license for foreign exchange remittance in November, which means the second half of the fiscal year. In this period, it received a remittance of one million USD. So, the contribution is not that big as it started somehow late.
When we talk about our success, we are not exaggerating them just to take the credit as leaders, but if you take the challenges, we under went in the year we would have lost even more than 61 billion. We have viable excuses if we fail to achieve our goals.
In addition to local problems there were also international factors like the shortage of containers to import inputs for our expansion projects. COVID has also affected the production of chip sets, devices and their supply to us. As a result, out of our plan to import 1.2 million devises and provide them on installment credit basis, we were able to import only 600 thousand of them due to the shortage of production. These 778 operators need supply to do their jobs. Furthermore, the import also needs a lot of efforts like negotiation skills. It has affected our projects timely completion. This has affected the revenue which we would have earned had the projects been completed. So, the intervention we took has helped us compensate the loss.
But the accomplishment of our projects is noticeable. We have executed 217 of them which is 71 percent of the total. That is why we were able to supply 144 products and services to the market. When it comes to protecting our clients, we have also taken measures to ensure affordability so that our customers can cope with the economic pressure. This is because the economic pressure could affect customers to divert their attention to basic needs. Accordingly, we have introduced affordable packages that range from one birr airtime to unlimited. These days the value of one birr is almost insignificant that it cannot buy anything. But we made affordability an issue so that our customers can give priority to their basic issues. This is one of the success areas for us. Actually management principle argues that affordability is guaranteed only when there is competition. But Ethio telecom can boast of ensuring affordability in the absence of competition market.
This is because the objective of the telecom sector reform is to ensure affordability. When you have no competitors you can solely set the price for your services. As you can see during the last four years contrary to the market price hike, we have never raised service charge. We have managed to ensure affordability to our customers by reducing operational cost.
When you say that Frehiwot won an award, nobody knows me personally. But I was able to win the award under the framework of ethio telecom which succeeded in ensuring affordability. And affordability is implemented to benefit the people, improve life. Though we have not directly implicated the goals included in the UN Sustainable Development Goals (SDGs) ultimately our works have realized that goal. My philosophy as a CEO is that it is not a must to have a competitor to ensure affordability and or do ethical business. Competition is not a must in order to deliver ethical business. No institution should seek unfair profit because there are no rivals. This is my belief. Every sector should gather profit that can only cover its expenses and they can ensure sustainability of the company. That is one of my principles for management. As you may remember I decided to cut the service charge by 40 to 50 percent only within a month or two after I took over this position. I did this because there is a need to consider the peoples’ purchasing power.
This has challenged us because the sector is capital intensive and needs foreign currency too. We have been cutting our expenditure so that we can reduce service charge.
We have a lot of issues on our table but our approach to achieve them is by prioritizing the urgent ones. There are 200 or 300 ideas to work on. But we have to prioritize those that give the best satisfaction to our customers. This has played a lot of roles.
But beyond mere figures, Ethio telecom has played uncontested role in the economic development of the country. For example, it has helped organizations carry out their routines despite COVID restrictions. We have a reason when we claim that we are creating digital Ethiopia as we are marching towards digital connectivity.
We chose to do practical jobs before talking about our achievements. But by now we can speak loudly about them. Yet that doesn’t mean that we have finished our works. We are indeed realizing digital Ethiopia, and it will continue further.
What are you doing to cover neighboring countries?
Previously ethio telecom was established with a license only to provide basic telecom service inside the country. So, during the establishment of Telebirr we requested the amendment of the establishment proclamation so that we can be able to engage in financial activities as well as to operate out of the country. By now we have obtained this license to buy shares and operate out of the country. But we cannot engage in it in practice because this year we have come across urgent national issues. The main thing is to put in place the enabling environment. After sorting out factors like finance and human resource we can engage in that.
What were the major challenges to the service delivery of the company?
In the budget year, about 45 percent of our sites were closed. One challenge was lack of security. The other one was interruption of power supply. In order to launch new sites, we have to have power supply. So, we have put in place our own alternative power supply system. Accordingly, about 50 percent of our BTS use alternative power supply. Some 22 percent use solar power. We are delivering this alternative power supply as power is an integral component of telecom network expansion. Absence of energy doesn’t only delay the network expansion but also affects quality of the service.
In areas like Afar and Amhara some stations are not accessing commercial power. But they are using alternative power for about 18 months. This is what raises our expense. Some 52 percent of BTS receive subsidy. The subsidy is part of our intent to benefit all our clients. With regard to quality, it is not a one-off job. It keeps on improving continuously. We optimize every time by looking at the network congestion. Currently, there is a continuous expansion work around Addis Ababa. As part of the 217 projects we are implementing, we continuously engage in network optimization. The rainfall also could affect some stations that operate on solar energy.
What were the major achievements of Ethio telecom in discharging its corporate social responsibility?
In the budget year, Ethio telecom has spent over 400 million Birr for its corporate social responsibility. This is done financially, materially …etc.
In war ravaged areas we have renovated our facilities with our own budget and have restored them rapidly. This is part of our routine jobs and also a share of the problem that befell on our country.
We have also built 65 digital labs in selected secondary schools. In general, Ethio telecom’s social responsibility activities are clearly visible to the society. In addition to the corporate contribution, our employees also contribute to nationwide noble objectives.
Thank you very much.
Thank you
The Ethiopian Herald 6 August 2022
