France Telecom’s contract ends


ET takes over management

The French telecom giant, France Telecom’s (Orange) management contract with Ethio Telecom (ET) will end on December 13th and Ethiopian staff will take over the management of the state owned monopoly.
Debretsion Gebre Michael (PhD) Deputy Prime Minister and Minister of Information and Communication told Capital that the contract between ET and the French telecom firm that began managing the state-owned telecom monopoly at the end of 2010, signing a two year contract with the aim of boosting telecom operations, ends this month.
“We will not extend the contract further,” Debretsion said.

However the recently appointed new CEO of ET Bruno Duthoit will continue to lead the company, which is a separate arrangment from the management contract of France Telecom.Debretsion also said that ET is not negotiating with any other foreign based telecom firms for another management contract.
Meanwhile, sources indicated that a detailed evaluation of France Telecom’s accomplishments is being undertaken.
Asked about the report, Debretsion said that the evaluation on the performance of Orange will be disclosed during the official handing over ceremony. “Customers and the staff of ET can evaluate individually the performance; but the official performance report will be disclosed later,” added Debretsion.
According to the deal, Orange has undertaken several expansions and introductions of new automated services for local customers. Ethio Telecom’s customer base has reached 18.28 million subscribers, registering a 59 percent increase in the last fiscal year. Mobile services, which constituted the vast majority of the customer base, are anticipated to reach 21.9 million subscribers, and in actuality attracted 17.28 million customers. This was an increase of 700,000 people, a 79 percent achievement of the target. Fixed line numbers reached 805,000 customers or 81.4 percent of projected performance targets.
The Deputy Prime Minister further explained that the positions held by France Telecom employees have already been covered by Ethiopian employees in the last couple of months. “We will replace the management positions by our own staff according to the plan,” said Debretsion who is also board member of ET. Sources at the telecom firm said that management operation at ET have significantly improved during the period it was managed by France Telecom.
ET’s overall gross revenues for the last fiscal year were 12.35 billion birr, with two thirds coming from mobile services. This was 70 percent of the 17.57 billion birr they had aimed to rake in.
Ethio Telecom’s net profits, the money actually earned after taxes and other fees, amounted to 8.87 billion birr. They had hoped to net 10.16 billion birr.
Almost one quarter 22.4 percent of Ethio Telecom’s profits came from international traffic interconnection with the rest primarily coming from fixed telephone lines.