Doubles profits in its first competitive year

The state owned telecom operator, Ethio telecom, continues to fly high as profits double in the recently concluded budget year that end July 7.
As mobile money booms in the country, telebirr transactions hit astronomical heights with transactions leaping over 22 folds just in a year. The smooth sailing for the telecommunications firm during the year was welcomed by forward paving ventures with the firm unveiling116 services and products.

The telecom operator which during the course of the year faced its first competitive experience courtesy of Safaricom embarking operations in October stated that it has surpassed revenue targets it set for the 2022/23 budget year.
The firm’s CEO, Frehiwot Tamiru, whilst giving a snapshot of the year pointed out that some hurdles were faced stemming from lack of foreign currency, service outage due to the conflict in the northern and some other parts of the country as well as through power interruptions.
Nevertheless, as the CEO indicates that did not deter the company from accomplishing significant milestones for the year.
In the budget year, the enterprise generated 75.8 billion birr in revenue, which was 101 percent of the projection, while also being 23.5 percent higher in contrast to the 61.3 billion birr of last year’s performance.
According to the telecom provider, the result was attained through expansion of its revenue sources, mainly through offering customer and institution-centered digital solutions and digital finance services beyond the basic telecom services.
The revenue share when described in terms of service types showed 43.7 percent share for mobile voice that was 51 percent in the 2021/22 budget year, 26.6 percent for data and internet and 9 percent for international business.
The remaining 6.9 percent, 4.7 percent and 7.2 percent were then contributed from value added services, devices and 7 other services respectively.
Regarding foreign currency earnings that includes services like international interconnections, roaming, infrastructure share and international remittance generated USD 164.1 million which were 107.8 percent of the target.
“This achievement is made possible due to the increase in the amount of traffic handled by all services,” the firm disclosed, citing that there was 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, the state owned telco registered 51.2 percent in Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) by increasing its revenue and instilling cost-saving practices and culture.
“The EBITDA amount has grown by 24 percent when compared to last budget year with 135 percent of the target performance being met,” the high flying firm underlined.
The enterprise had been projected to achieve a net profit margin of 22 percent, while the actual performance hit 25 percent recording a growth of 109 percent in comparison to the net profit from the previous year.
The CEO explained that in the reporting period, the enterprise profit had reached 18.8 billion birr that was almost nine billion birr a year back.
Regarding expenses, the enterprise has paid out of 82.2 billion birr for various payments in the budget year that included; 20.8 billion birr for taxes and 4.23 billion birr (USD 78.4 million) for loan payments.
The telecom operator disclosed that during the budget year, its total subscribers increased by 8 percent from the previous budget year to reach 72 million, achieving a 98 percent subscriber base target.
According to the annual report, mobile voice subscribers reached 69.5 million, while data and internet users hit 33.9 million.
As the firm disclosed, the telecom density has reached 66.8 percent.
“Among the 774 operators in the world, we are the 2nd largest in subscriber base in Africa and 21st in the world,” the CEO explained.
She said that for the year, her enterprise has introduced 116 new products and services that included; 11 international, 12 consumer, 18 fintech, 19 digital and lifestyle services. In the period under review, the enterprise products and service provided to customers reached 203 with 87 revamped business segments.
The Telebirr Boom
The mobile money platform that was introduced about two years ago by the telecom giant now boasts a 34.3 million subscriber base with a total transaction value of 679.2 billion birr that was boosted 22.6 folds in contrast to 30.3 billion birr, a year ago.
The year also saw gas fueling through the use of telebirr and other digital schemes being mandatory which was a huge boost for the platform.

According to Firehiwot, the transaction volume for the year was 390 million, while USD 2.5 million in remittances was transferred from 45 countries.
In the year telebirr Sanduq, telebirr Mela and Endekise were launched in partnership with Dashen Bank in August 2022 to ensure access to financial services and in promotion of financial inclusion. As a result, micro loan services of over 4.1 billion birr were provided to 2.4 million customers using tele birr Mela and Endekise, while over 768,000 customers were able to save more than 3.6 billion birr using telebirr Sanduq (micro saving).
“Furthermore, in our partnership with Commercial Bank of Ethiopia (CBE), we launched additional telebirr digital financial services namely telebirr Sinq, telebirr Enderas and telebirr Adrash in June 2023. And within 13 days of the launch, 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,” the CEO disclosed.
According to the firm, as part of the 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.