Ethiotelecom Claims Height, Holds Sway in a Competitive Landscape

Jun 24 , 2023

The state-owned Ethiotelecom presented its first-ever performance report in its 129-year history before Parliament last week. Spearheaded by the CEO Frehiwot Tamiru, the telecom company which has been the sole operator in the country for over a century devised a strategy that focused on increasing its market share, reducing operational expenses and increasing profit margins amidst a new entrant. Following this, the telecom company managed to become the second largest operator in Africa boasting a 70 million strong customer base, superseded by South Africa's MTN. Internet users passed the 30 million mark, with data costs dropping to 0.05 Br per MB. The Company has garnered 52 billion Br in revenues with a 22pc profitability rate. It paid 50 billion Br in dividends to the government within the decade while having a 130 billion Br hefty tax bill. Frehiwot mentioned that obstacles attributed to the shortage of foreign currency, cement delivery and power outages plagued the year's performance. The Ethiopian Investment Holding is the sovereign wealth fund of the country, with more than 30 state-owned enterprises under its umbrella planning to offer a significant stake in Ethiotelecom to the private sector. Frehiwot indicated maintaining growth while preparing to forego stakes is remarkable. "Privatisation should have shaken the institution," she said. The report was presented to the Standing Committee of Development Enterprises chaired by Mohammed Abdo (Prof) with the members raising questions related to finance, infrastructure, human capital and service provision. While boasting a 23,000Km fibre network, Ethiotelecom managed to cut costs by 4.8 billion Br despite having 853 of its mobile sites restored after damage during the conflict, natural disasters and infrastructure development. She mentioned that the company built a little over half of its infrastructure on its own despite it being the mandate of the Ethiopia Communications Authority. "It costs us twice as much when we extend to rural regions," Frehiwot told parliament. According to Frehiwot, there is still work waiting to restore 352 of its mobile centres while the company managed to rehabilitate 1,886Km of fibre in war-stricken areas. As she spoke of the strength and resilience of the company's 40,000 staff, Seleshi Kore (PhD), deputy chairperson of the committee, questioned the company's inclusivity of women comprising only 28pc women in the workforce, particularly the middle management level. Frehiwot championed the success of their mobile money service Telebirr reaching 30.5 million users as its applicability expanded with the government imposition of mandatory use of digital money for refuelling vehicles. Over 57 billion Br was transacted over Telebirr for fuel alone all the while giving out 1.9 billion Br loans to 1.2 million customers. The Standing Committee Chairman Mohammed advised that Ethiotelecom invest more in innovative research to come up with new technology.