This report covers the performance period from July 2023 to December 2023.
Cognizant of the relevance and multiple active role Ethio telecom has in our country’s overall progress and prosperity, our company has been undertaking a wide range of projects and operations to expand telecom infrastructures and systems, improve the quality of service and increase the outreach of benefits to the community. In particular, 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.
Our company is achieving excellent results by designing and implementing its three-year LEAD growth strategy to realize its aspiration to become a leading digital solutions provider in the competitive telecom market while playing its enabling role for the overall progress and prosperity of our country and realize digital Ethiopia.
This year is the midpoint of the strategy period and in the first half of the budget year, our company has conducted vast activities and advancements to attain its set strategic objectives, enhancing customer experience and satisfaction through ensuring operational excellence; deploying new and enhanced infrastructure and systems, service availability, quality and affordability; effective resource utilization and enhancing financial capacity, devising cost optimization strategies.
In addition, extensive work has been done to ensure financial inclusion, bring new services and convenient procedures and make institutions use digital payment options, support government and enterprise institutions with technology and strengthen collaboration, prevent telecom fraud and cyber-attacks in an organized and complete manner, build leadership and staff capacity building and empowerment, and building reputable brand.
NUMBER OF TELECOM SUBSCRIBERS
During the first half of the budget year, our total subscribers reached 74.6 million achieving 98.3% of the subscriber base target. This increment is a 4.7 million or 6.7% increase from the previous budget year similar period. When seen in terms of service types, Mobile voice subscribers reached 71.7 million, Fixed broadband 688.3 K, fixed Voice 834K and data and internet users reached 36.4 million. Telecom density has reached 68.5%.
PRODUCTS & SERVICES EXPANSION AND NETWORK CAPACITY & COVERAGE ENHANCEMENT
This performance in customer base is realized through the network and system infrastructures expansion and optimization works that enhance customer experience and satisfaction, the expansion of more service centers and engagement of more distributors/partners, the release of new products and services, the commercialization of 5G services in Addis Ababa and certain regional cities, as well as through the offering of 114 (64 new and 50 revamped) local and international products and services.
In terms of enhancing quality of services, network coverage & capacity, various projects are underway while 5G mobile technology service is already commercialized in certain cities. During the half-year, vast mobile network expansions and capacity enhancements have been done to serve additional 678.2K customers over a 3G network, 1.1 million customers over a 4G network, 148.2K over a 5G network. As a result, a total capacity of serving additional 1.9 million customers were created, which brought the total mobile network capacity to 81 million.
RURAL CONNECTIVITY
During the half year, 41 new mobile stations that can accommodate 229,000 customers have been made on air in rural areas providing services in 10 regions and 41 woredas. In addition, 3G expansion works have been carried out on 92 existing sites in rural areas.
REVENUE PERFORMANCE
During the half-year, our company generated a total of 42.86 Billion ETB in revenue and achieved 98% of its target through expanding its revenue sources, providing affordable new and revamped products and services, and providing various mobile finance and digital services. This income when compared to previous year same period, shows an
8.86 billion ETB or 26% increment. The revenue share when described in terms of service types shows 41.8% share for mobile voice, 25.7% for data & internet, 9.3% for international business, 8.7% for value added services, 5% for devices (handsets, dongles, modems) and 1.1% for infrastructure share, 2.5% for telebirr and 5.9% share from other services. From foreign currency generating services (international interconnect, roaming, infrastructure share and international remittance) 84.7 Million USD was generated, achieving 109% of its target. This achievement was made possible due to the increase in the amount of traffic handled by all services which when compared to previous year same period has shown a growth of 33.6% in voice traffic, 53.8% in mobile data, 77.4% in SMS, and a 30.1% in international traffic.
Our company was able to save more than 2 billion ETB by implementing cost saving strategies, achieving 113% of its target.
Based on our company’s internal financial report (a report that is yet to be audited), our company has registered 46% or 19.77 billion birr in Earnings Before Interest,
Tax, Depreciation and Amortization (EBITDA) achieving 137% of its target while it generated a net profit of 11 billion birr, which is a 14% growth compared to the same period last year, and a profitability rate of 26%. This was made possible due to the outstanding works done in diversifying and increasing revenue, cost optimization initiatives and effective utilization of resources.
In this first half year, our company has paid 18.5 billion birr in tax, 2.46 billion birr ( USD 43.4 million) in loan repayment and 4 billion birr in dividend. Our company has been recognized and awarded at various times as an institution that is playing a major role in
the overall development of the country. In 2015 EFY, it was recognized as a platinum tax payer by the Honorable Prime Minister under the scheme of the Ministry of Revenues for paying an annual tax of 21.9 billion birr.
Our company has been conducting financial audits on time to ensure financial transparency and to implement the regulations and guidelines issued by regulatory bodies and is issuing its financial reports in accordance with the International Financial Reporting System (IFRS). Accordingly, the 2015 fiscal year financial report has been examined by external auditors and it has been confirmed that it is unqualified. In addition, the first quarter of 2016 financial year has been audited and the second quarter has been audited.
TELEBIRR AND DIGITAL FINANCIAL SERVICES
Telebirr has acquired 41 million customers in the half year, achieving 104% of its target with a transaction value of 910.7 billion. Since its launch, a total of 1.7 trillion birr has been transacted in the economy. Telebirr has been recognized as the gold award winner by the Future Digital Accreditation Institute in 2023 in the best mobile money supply sector for its significant role in building a digital economy and ensuring financial inclusion in our country.
telebirr digital financial services namely telebirr sanduq, telebirr Mela, telebirr Endekise, telebirr sinq, telebirr enderas, telebirr adrash were launched in partnership with Dashen Bank and Commercial Bank to ensure access to financial services and promote financial inclusion. As a result, micro loan services of over 8.3 Billion Birr were provided to 3.8 Million customers whereas 1.5 million customers were able to save more than 8.4 billion birr.
In order to ensure accessibility as well as benefit our partners, 889 service centers, 149 master agents, over 145.9K agents and over 143.6K merchants have been engaged so far. In addition, integration with 25 Banks is completed enabling money transfer from Bank to telebirr and vice versa.
As part of realizing digital Ethiopia, 602 governmental and non-governmental institutions including the Ministry of Foreign Affairs, Ministry of Innovation and Technology, Ministry of Trade and Regional Cooperation, Immigration and Citizenship Service, Ethiopian Airlines, Addis Ababa City Administrative Revenue Bureau, Oromia Region Revenue Office; The National Lottery, various universities etc have integrated their payment
system with telebirr. As part of fuel management digitalization initiative, 1,447 gas stations have started receiving fuel payments via telebirr and with this, more than 54 billion Birr fuel transactions (both subsidized and non-subsidized) were managed through telebirr.
Through the expansion of different partnerships in the ecosystem such as bank-to-wallet and wallet-to-bank money transfer partnerships that increased customer convenience and accessibility and engaging in utility payment services, microfinance and other new services, our company has registered an average of 1.13 million new customers per month in the last six months.
HUMAN CAPITAL, CAPACITY BUILDING AND CONDUCIVE WORK ENVIRONMENT
To effectively execute the company’s strategy, to ensure sustainable growth and profitability of our company in the competitive market, developing competent leadership team and staff is a key priority that needs continuous investment and attention. Accordingly, in the fiscal year, various capacity building interventions were made with more than 15.1K employees attended online training while 6.2K employees attended in person training.
In addition, employees were made to participate in the organization’s strategy preparation and performance evaluation to enhance the employee’s motivation and ownership spirit. improve the supply of work equipment, to ensure a comfortable and safe working environment, and to create a better working environment by implementing various incentive systems. Since employee dedication is critical to the company’s competitiveness and success, a survey of employee engagement was conducted with McLean & Company, an internationally experienced research firm. Corrective measures shall be taken based on the findings from the study.
CORPORATE SOCIAL RESPONSIBILITY
As part of its Corporate Social Responsibility and Its commitment for the societies overall progress, our company’s interventions have continued to have a positive impact on society, environment, and all stakeholders. Its CSR projects focused in strengthening
communities by targeting the fundamental drivers of long-term development such as education, health, agriculture, environmental protection, greening and beautification of cities. In the half of the year, it has contributed a total of 449.6 million birr in kind and in cash for education, health, humanitarian aid, environmental protection, greening and beautification and for national projects.
Ethio Telecom is highly committed to environmental protection activities and greenery programs, and accordingly, over the years, millions of saplings have been planted in several stations by involving employees.
In addition, the corporate spirit is also reflected by our staff across the country by voluntarily mobilizing more than 5.2 Million ETB for various humanitarian activities. Also, their material and in-service support including blood donation has been enormous.
CHALLENGES AND UNDERTAKEN SOLUTIONS
During the half year, our company has faced different challenges such as service outage due to security problems in different parts of the country, power interruption, lack of foreign currency, fiber and copper cable vandalism, land acquisition delay, shortage of construction materials, telecom fraud etc.
The outstanding performance recorded amid the challenges and the competitive market is very encouraging and motivates for more efforts and success.
Finally, we would like to extend our most sincere gratitude to our employees, our customers, vendors, business partners, the media and other stakeholders for their contribution to the outstanding performance in the budget year.
23 January 2024
ETHIO TELECOM