Ethio telecom eyes Djibouti’s telecom market, to make its first oversees service to the bordering state owned telecom company.
“Based on the re-amendment of the Ethio telecom establishment proclamation, we have been working to figure out priority areas to expand our business outside of Ethiopia and to stay competitive,” said Frehiwot Tamiru, CEO of the telecommunications firm whilst speaking at a press briefing given on Thursday July 22, 2022 regarding its annual performance. The CEO indicated that after analyzing both shortage of foreign currency and limitation of capital of the state owned telecom-company, the firm has completed selecting priority areas and its preparation to expand its business outside of Ethiopia for the 2022/23 fiscal year.
Despite the CEO not disclosing the names of countries of interest, sources explain that the firm is planning to expand its business in to the Africa market including managing telecom companies such as that of the Djibouti telecom market. To this end, according to sources higher officials of Ethio telecom have paid a visit to Djibouti to assess the overall situation.
The Djibouti government is aiming to sell a minority stake(40 percent) in the incumbent telco (retaining some control of decisions) while securing the financial backing and the management acumen of a foreign operator. The scheme is part of a larger plan to modernize the country’s economy more generally.
“One of our request to the re-amendment of the establishment proclamation is to be able to start serving outside of Ethiopia,” said the CEO indicating that even though Ethio telecom received the permit to work at an international level, it still didn’t start making moves as of yet. Ethio-Telecom Establishment (Amendment) Council of Ministers regulation no. 480/2021 allows Ethio telecom to participate in any equity investment both domestically and at international levels.
In the already ended 2021/22 fiscal year, Ethio telecom has garnered 61.3 billion birr in revenue, which is 87.6 percent of the target and 8.5 percent increment from the previous budget year.
“Given the current challenging environment in our country, this achievement can be considered as remarkable,” said the CEO. The main factor for Ethio Telecom’s under-performance is the continuing civil war in the Tigray region. Out of 3,473 base stations, 45 percent from the total were out of operation and 1,144 of those sites are still out of operation. As indicated its earnings before Interest, Taxes, Depreciation and Amortization (EBTDA) was 60.4 percent of the revenue.
On her six month report of the firm, restoration costs were estimated at 328.9 million birr. As the CEO indicated, her firm has done its analysis to know the overall infrastructure damage due to the war in the northern part of the country. “Perhaps there are still many woredas [districts] remaining including Tigray region where we cannot provide our services and nor can the conditions and status of our telecom infrastructures be known,” explained the CEO. Besides Ethio telecom as Frehiwot said the World Bank is also doing its analysis to know the overall infrastructure damage on Ethio telecom.
The revenue share when described in terms of service types show 51% share for mobile voice, 27% for data & internet, 10% for international business and 5.7% for value added services and 6.6% for other services. During the period, 146.6 million dollars had been generated in foreign currency scoring 82.3% of the target.
According to the report total subscribers of ethio telecom have reached 66.59 million, achieving 104% of the subscriber base target and an increase of 18.4% from the previous budget year similar period. Mobile voice subscribers reached 64.5 million, Data and Internet users 26.1 million, Fixed Services 885.3K and Fixed Broadband subscribers reached 506.8K. Telecom density has also peaked at 63.3%.
“Ethio Telecom is currently engaged in various network expansion and telecom infrastructure capacity enhancement projects. The rollout of 4G/LTE has been completed in 136 cities and pre-commercial 5G services have been launched in Addis Ababa depicting our achievements in the year,” said the CEO adding that, “Currently, we are running a total of 217 projects on infrastructure and system capacity expansions and enhancements aiming to boost network coverage.”
Beside the telecom service, Ethio telecom’s Telebirr has acquired more than 21.8 million subscribers within 14 months with a total transaction value of 30.3 billion birr. Moreover, it has more than 76,000 agents and over 21,600 merchants engaged on the platform so far. In addition, 974.3K USD was remitted through the international remittance service partnering with 37 counties within the last six months.
Ethio telecom is the second-largest operator out of 195 African operators and rated 26th overall out of 778 companies, according to GSMA.