Ethio telecom is Ethiopia’s state-owned telecommunication service provider and one of the giant providers of telecom services in the country. As such, it plays a significant role in the Ethiopian economy and is a major contributor to the government’s revenue.
One of the economic advantages of Ethio telecom is its potential to generate significant revenue for the country. During the just ended Ethiopian fiscal year, Ethio telecom has generated revenue of over 75.8 billion Birr, making it one of the largest revenue-generating entities in the country.
In addition to generating revenue, Ethio telecom also plays a key role in the development of the country’s telecommunications infrastructure. The company has invested heavily in expanding its network and improving the quality of its services which has helped to increase access to telecommunications services in Ethiopia. This, in turn, has the potential to drive economic growth by improving connectivity and facilitating the development of new businesses and industries.
Furthermore, Ethio telecom has the potential to attract foreign investment to the country. As Ethiopia continues to open up its economy and attracts foreign investors, a reliable and efficient telecommunications infrastructure is essential to support business operations. The company is also well-positioned to capitalize on this trend and attract investment from telecom companies and other businesses looking to expand their operations in Ethiopia.
Regardless of this fact, Ethio telecom has recently commenced the budget year with the implementation of its three years LEAD Growth Strategy. It also set strategic objectives and goals that help it to realize its aspiration to become a leading digital solutions provider in the competitive telecom market while playing its enabling role for the overall progress and prosperity of the country and realize digital Ethiopia.
Briefing about LEAD growth strategy of the company last week, Ethio telecom CEO, Frehiwot Tamiru stated that the company is providing digital; connectivity solutions that help its customers simplify their lives. This also enables enterprises to streamline their businesses and increase their productivity thereby building the digital economy of the country.
Moreover, the company has been resiliently working hard in enhancing customer experience and satisfaction to become a leading digital solutions provider in the fast and dynamic telecom market to meet the growing demand for telecom services. It has been undertaking a wide range of projects and operations to expand telecom infrastructures and systems to improve the quality of service and increase the outreach of benefits to the community, she underscored.
Briefing journalists on the company’s revenue, the CEO further explained that the company has generated a total of 75.8 billion Birr in revenue and achieved 101 percent of its plan through expanding its revenue sources. According to her, offering customer and institution-centered digital solutions and digital finance services are beyond the basic telecom services that enable to achieve successful result during the last Ethiopian fiscal year.
As to Frehiwot, the revenue share in terms of service types shows 43.7 percent for mobile voice, 26.6 percent for data and internet, 9 percent for international business, 6.9 percent for value added services, 4.7 percent for devices (handsets, dongles, and modems) and 7.2 percent for other services.
From foreign currency generating services (international interconnect, roaming, infrastructure share and international remittance) 164.1 Million USD was generated achieving 107.8 percent of its target. This achievement is made possible due to the increase in the amount of traffic handled by all services. There is a growth of 34.5 percent in voice traffic and 94.5 percent in data traffic when compared to the previous fiscal year.
“In the reporting period, our company registered 51.2 percent in Earnings before Interest, Tax, Depreciation and Amortization by increasing its revenue and instilling cost-saving practices and culture. The net profit margin has reached 25 percent showing a growth of 109 percent compared to the net profit last year’s budget year. This was made possible due to the outstanding works done in diversifying and increasing revenue, cost optimization initiative and effective utilization of resources,” she explained.
According to the document obtained from the company, it has devised and implemented cost optimization strategies to reduce costs and utilize resources properly to drive efficiency and profitability coupled with its effort made to diversify its revenue streams. Through formulating and implementing the strategy, outstanding results have been recorded since the last fiscal year. In this fiscal year, the company saved more than 6.47 billion Birr achieving 106 percent of its target.
The document further stated that the company has paid out 82.2 billion Birr for various payments during the last fiscal year of which 20.8 billion Birr for taxes, 4.23 billion birr (78.4 million USD) for loan payments, 2.5 billion Birr for dividends and 54.6 billion Birr for capital expenditure (CAPEX) and operating expenditure (OPEX) and other expenses.
While elaborating about enhancing digital economy, Frehiwot further elucidated that mobile money business “telebirr” which was introduced with the aim of meeting the country’s growing demand for digital financial services and to ensure financial inclusion, has 34.3 Million subscribers with a total transaction value of 679.2 billion Birr.
Mentioning that the telebirr digital financial services namely telebirr sanduq, telebirr Mela and telebirr Endekise were launched in partnership with Dashen Bank in August 2022. She said that the service is vital for ensuring access to financial services and promote financial inclusion. As a result, micro loan services of over 4.1 billion Birr were provided to 2.4 Million customers using telebirr Mela and Endekise. And over 768K customers were able to save more than 3.6 billion Birr using telebirr sanduq (micro saving).
Furthermore, in the partnership with Commercial Bank of Ethiopia (CBE), the company launched additional telebirr digital financial services namely telebirr Sinq, telebirr Enderas and telebirr Adrash in June 2023. And within 13 days of the launch a micro loan services of 155.3 million Birr were provided to 25,666 customers and 2,564 customers were able to save 14.2 Million Birr, she added.
Additionally, 521 governmental and non-governmental institutions have integrated their payment system with telebirr as part of building digital Ethiopia. As part of fuel management digitalization initiative, 1,263 gas stations have started receiving fuel payments via telebirr and with this, more than 66.5 billion Birr fuel transactions (both subsidized and non-subsidized) were made through telebirr. According to the CEO, thus, the service can highly support the nation’s economy.
She further emphasized that the company is playing significant role in the economy both as an engine for multiple economic and social sectors, and creating job and income opportunities for many citizens through working in partnership with stakeholders coupled with hiring indefinite and definite term employees and other partners engaged in outsourced businesses.
The company has 17,202 permanent employees of which 12,317 (72 percent) are male and 4,890 (28 percent) are female. In addition, it has 22,792 temporary (contract) workers most of which are security guards responsible for keeping infrastructure and service centers, it was learnt.
Overall, Ethio telecom has the potential to be a significant driver of economic growth in Ethiopia, both through its contribution to government revenue and its role in expanding the country’s telecommunications infrastructure.
BY HIZKEL HAILU
THE ETHIOPIAN HERALD THURSDAY 3 AUGUST 2023
