The Ethiopian Communication Authority has compelled Ethio telecom, the country’s dominant telecom operator, to reduce infrastructure rental fees for new entrant Safaricom Ethiopia. In addition, the regulator requires that most payments now be made in local Birr rather than U.S. dollars. Messay Woubishet, Chief Communication Officer at Ethio telecom, acknowledged the challenge this currency shift poses for foreign exchange needs essential to expanding infrastructure. “We buy almost everything in foreign currency,” he said. Infrastructure-sharing revenue accounted for only 2.6pc of Ethio telecom’s total revenue of 85 billion birr. Despite its small share, the income from shared infrastructure grew more than 35 percent year-on-year. Voice services remain the dominant revenue source at 30.4pc, followed by data and internet revenue at 28.3pc. Foreign currency inflows remain limited. Ethio telecom secured just 3.16 million dollars in foreign currency from a total of 88.19 million dollars in hard currency, achieving only 83 percent of the planned target. Most of the foreign currency was earned through international services (69 million dollars) and remittance services (16 million dollars). The reliance on local currency receipts is a key factor behind the shortage of hard currency, prompting the company to seek alternative solutions through international financial institutions and coordination with federal and regional government bodies. Even as an unaudited report, Ethio telecom posted a gross profit (EBITDA) of 42.36 billion Br, with a gross profit margin of 49.8pc. The company also paid 35.6 billion Br in taxes to the government over the past six months.

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