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Tigray civil war means Ethio Telecom misses target by $14.4 million

Ethio Telecom HQ.jpg

Ethiopia’s continuing civil war is the reason the company achieved only 87.6% of its target revenue in the year ending 30 June 2022, Ethio Telecom said at the weekend.

This sum, 61.3 billion birr (US$1.16 billion), was nevertheless 8.5% up from the year ending 30 June 2021, said the company in its annual report. The shortfall of 12.4% on target is equivalent to $14.4 million revenue.

State-owned Ethio Telecom said: “Had it not been for the crisis in the North region as well as in some other parts of the country which have resulted in service outage in 3,473 sites, the targets would have been met.”

The Tigray People’s Liberation Front has been waging the war against the government of prime minister Abiy Ahmed since 2020 – though this war has taken over from one that was waged by the Ethiopian People’s Revolutionary Democratic Front for 28 years until 2018.

Ethio Telecom, which faces imminent competition from Safaricom Ethiopia, part of the wider Vodafone group, said: “We have been resiliently working hard, enduring the challenges in the current crises to become a competent and preferred telecom service provider in the fast and dynamic telecom market to meet the growing demand for telecom services.”

Its Telebirr mobile money and digital financial services business, launched in May 2021, already has 21.8 million subscribers, with a total transaction value of 30.3 billion birr ($575 million).

Safaricom, whose Kenyan shareholder of the same name was the pioneer in the world’s first successful mobile money service, M-Pesa, will have an uphill struggle if it is to compete with Telebirr.

Safaricom Telecommunications Ethiopia said three weeks ago that it will start rolling out services between August and April 2023. The original plan was to start in April 2022.

Ethio Telecom’s penetration is now 66.6 million customers, out of a population of 115 million. This was “104% of the subscriber base target and an increase of 18.4% from the previous budget year similar period”, said the company in its weekend statement.

Mobile voice subscribers reached 64.5 million, providing 51% of revenue. There were 26.1 million data and internet users.

The fixed market is much smaller, with 885,000 users or whom 506,000 have broadband. A tenth of Ethio Telecom’s revenue comes from international services.

The report did not comment on the government’s plans to sell off a 40% share in Ethio Telecom – postponed in March because of “recent developments and fast-moving macroeconomic changes”.

The company paid 18.8 billion birr ($357 million) in tax and 500 million birr ($9.48 million) dividend in the year to 30 June 2022, it added.

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