August 31 , 2019
By YOSEPH MERGU ( FORTUNE STAFF WRITER )
The state giant Ethio telecom has given itself one year to prepare for new competition that will join the market when the government implements liberalisation of the sector.
The company’s three-year strategic plan that was unveiled last week assumes that there will not be other operators in the sector for a year and Ethio telecom will remain a state-owned monopoly until the end of the current fiscal year.
The plan, developed in-house, was prepared after considering and reviewing relevant government policies, international best practices and industry trends.
“We designed the strategy in a way that will make us competent, desirable and the best in the industry,” said Frehiwot Tamiru, CEO of Ethio telecom.
Ethio telecom says numerous significant analyses have been made regarding the interests of internal and external stakeholders, present company performance, internal strengths and organisational resources and capacities.
In order to cope with future competition, the three-year plan sets a goal of decreasing service prices. It also plans to provide WiFi services in public areas like stadiums and parks.
The government, as part of its economic reform, is determined to open the telecom market to two international operators that will compete with Ethio telecom. The two operators will also enter the country after passing a bidding process, which is also expected to be finalised by the third quarter of the current fiscal year.
The government also targets to complete the partial privatisation process of Ethio telecom in the coming seven months. Keeping the majority share of 51pc, the government will leave the remaining shares to a foreign company.
Though the company hopes it gets a full year to adjust for the competition, it says the strategy it prepared is flexible to accommodate changes that will happen to the contrary.
The strategic plan also aims to raise its revenue to 45.4 billion Br by turning from traditional to value-added services.
In order to raise network coverage, the company plans to increase network capacity in Addis and the regions. It also aims to raise its total subscriber base from about 43.7 million to nearly 50.5 million by increasing mobile voice subscribers from just under 42 million to 48.3 million, data and internet users from 22.3 million to 28.7 million, and fixed broadband subscribers by 166pc to 240,000. This will take telecom penetration to 50.5pc.
To deliver accessibility, the corporation will be adding 73 additional shops that will raise the total number to 438. Moreover, 75,000 additional distributors and retailers will participate to raise the number of partners all over the country to 267,000.
Besides strengthening its institutional capacity, the strategy also considers boosting its human capacity.
“From our assessment, we have found that the value of the company rests on our employees, and we will focus on providing them with relevant knowledge and skill to enhance telecom industry dynamism," said Frehiwot.
Currently, Ethio telecom has 15,646 permanent and 18,000 temporary employees. The state giant obtained 36.3 billion Br in revenue in the just-ended fiscal year, obtaining 85pc of its target. The revenue rose by seven percent compared to the preceding year.
Experts believe that the strategic plan is timely.
They are aware that when the competition joins the market, there might be subscriber outflow, said Yihenew Wondie (PhD), assistant professor at Addis Abeba University's School of Electrical & Computer Engineering for over a decade.
“They have to expand their customer base by decreasing the service charge and focus on quality,” Yihenew told Fortune.
In addition, he believes there must be a strong regulatory body that checks whether customers are getting quality service and that it is reaching all citizens.
PUBLISHED ON Aug 31,2019 [ VOL 20 , NO 1009]
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