Ethio Telecom, which is underway to be partially privatized, is preparing its five years business strategy to stay as the leading telecom service provider when the new operators start their operation in Ethiopia.
On a press briefing given on July 13, 2021 regarding the overall performance of the company in the completed fiscal year, the CEO, Firehiwot Tamiru explaining the firm’s readiness for the coming telecom competition saying, “As a company, we do not underestimate the competition market, As there are healthy competitions, there will also be challenges that will not be overcome in order to win the market.”
Government has liberalized Ethiopia’s telecommunications sector as part of the country’s ongoing reforms to promote social, political and economic development and on May, 2021 a new telecommunications license had been awarded to the Global Partnership for Ethiopia.
According to Ethio Telecom, a comprehensive study has been carried out by Ethio telecom to protect its market and stay competitive.
“There will be a strategy review to stay competitive when the new operators enter to the economic business zone,” said CEO Firehiwot Tamiru.
As the CEO said, the company has conducted a five year strategic plan which has vast reform activities and advancement to attain its set strategic objectives in preparation for the upcoming competitive market which includes; enhancing customers experience and satisfaction through ensuring operational excellence, deploying new and enhancement of infrastructure and system service availability, quality and affordability, effective resources utilization and enhancing financial capacity.
As part of this ongoing liberalization process, last month Ethio Telecom launched a much-anticipated tender process for the sale of a 40% stake in the government-owned telecom. As the CEO said, the company is working on its business valuation for the next five years which can be important for the process of the privatization and moreover increases the value of the company.
“The company has been undertaking a wide range of projects and operations to expand telecom infrastructure and systems to improve the quality of service and increase the outreach to the community,”Frehiwot pointed out. Moreover, the CEO explained that having an already built and growing infrastructure is an alternative means of generating income since the infrastructure can be leased to the new entrants. As a result, Ethio telecom will use this defensive strategy to protect its market share in the country and will lease the infrastructure based on certain measures.
On related news, the operator reported an 18.4% rise 56.5 billion birr revenue in the completed 2020/21 budget year, in spite of internet shut downs related to civil unrest in the Tigray region and cyber-attack.
Ethio telecom has generated 56.5 billion birr revenue in the just completed year which is 101.7 percent of the target which was 55.5 billion. “It is a big achievement for us in a challenging budget year,” said Firehiwot. When compared with the last budget year, the revenue has shown 18.4 percent increase. Likewise in the year, the telecom operator has generated 166.5 million in dollar foreign currency, which is 106 percent of the plan.
From the stated 56.5 billion birr revenue, 47.5 percent of it is generated from mobile voice, Internet and data shared accounted for 27 percent of the revenue, and international business accounted 11 percent 9 and 5 percent of the revenue went to the value added service.
As the CEO highlighted, at the end of the fiscal year the number of customers for Ethio telecom has reached 56.2 million which is 108 percent of the target that the telecommunication firm had been planning at the beginning of the year showing a 22 percent increase when it is compared to the previous year. The breakdown shows that, 54.3 million of them are mobile voice users while 25 million are internet data customers, 374,000 were fixed broad band customers who increased by 76 percent from the last budget year. Moreover, the telecom density has reached to 54 percent.