ethio telecom short of target


Ethio-telecom, milked close to 10 billion birr from the sale of mobile and SIM cards alone in the just concluded Ethiopian budget year, Capital learnt. This revenue does not include the revenue collected by 173 shops the telecom monopoly operates throughout the country.
The telecom company collected over 7.5 million birr from the sale of SIM cards while more than 9.8 billion birr was generated from the sale of mobile cards according to Capital sources in Ethiopia’s sole telecom service provider. The company planned collecting 8.2 million birr from selling SIM cards and 13 billion birr from mobile cards. The actual revenue was 91 and 76 percent of its target, respectively. Experts in the company argue that the company will not attain the 17 billion birr revenue it envisioned for the just concluded Ethiopian budget year, almost twice what it pocketed the previous fiscal year.  Ethio telecom registered 9.1 billion birr gross surplus in the 2010/11 budget year, a little bit below its target of earning 9.9 billion birr.
“It is very unlikely that the telecom service provider will manage to collect over seven billion birr from the shops it operates throughout the country. That will undermine its target of becoming a billion dollar company at least for the concluded Ethiopian budget year,” argued experts. 
It introduced a new bundle of services dubbed ‘Mobile 150’ for prepaid mobile phones subscribers recently. The new package enables customers to call, text an SMS and surf the Internet at the same time. Clients are expected to have an air time that is worth more than 150 birr to be enrolled in the new service package. The new package offers clients a 20 percent discount as compared to the normal service schedule charges. 
The new bundle of services enables customers to use 150 minutes of domestic calls, 130 short messages  and download 50 megabytes of data through the Internet. All the services cost the customer only 150 birr.   
Recently, the telecom service provider introduc call back, credit transfer, post paid mobile services for individuals and group call services.
Ethio-telecom has subcontracted the Chinese telecom company, ZTE, to expand its mobile service provision. ZTE expanded Ethio telecom capacity at a cost of USD 1.5 billion which the company secured through vendor financing.
The government transferred the management to a French telecom operator, Orange; to transform the much-criticized telecom service to internationally accepted standards.
The management contract which brought France Telecom 30 million Euros over two years was approved by the Council of Ministers. The management transition from the former Ethiopian Telecommunication Corporation (ETC) to Ethio telecom started in July 2010 while the preparations for the actual kick-off started late November 2010. 
The government promised to grant an additional reward in case of excellent performance.  A performance of more than 95 percent involves an award while a performance between 75 and 95 percent will only complete the agreed payment. But in case of underperformance, a penalty of 5 to 10 percent will be levied and if the telecom company records below 60 percent the contract will even be terminated.
The state telecom utility has built the capacity to provide service to 23 million mobile telephone subscribers. However, the number of mobile phone subscribers reached over 18 million, up from last year’s 10 million. The number of Internet service subscribers has also increased from 100,000 to 2.5 million at the same time.  
The government predicts significant growth in the telecom sector for the years to come. The number of mobile subscribers, for instance, will increase to 40 million in 2015 while the broadband services are expected to grow and improve as well.
In related news, the telecom company warned dealers that they should not sell mobile SIM cards beyond the company price of 45 birr per SIM. The company claims that some dealers are selling SIM cards from 150 birr to 200 birr, breaching the contract they entered with it, according to a press release the company sent Capital on Friday July 27, 2012.