Ethio telecom launched of its LTE Advanced service for the first time in its South Eastern Region in cities including Adama, Bishoftu, Mojo, Dukem, Gelan and Awash Melkasa.
The expansion is based on where the company said that there is high mobile data traffic and surge in demand. “The service covers areas with a high demand for speedy internet,” said Frehiwot Tamiru, CEO of Ethio telecom during the launching ceremony held in Adama Haile Resort Hotel.
LTE Advanced mobile service is one of the latest mobile technologies providing reliable connections enriching customers’ experience with exceptional speed to download or upload large-sized data, high-definition (HD) multimedia, live streaming and video conferencing in real-time.
The new expansion will enable and empower customers to digitize their services, increase productivity and improve their experiences.
Speaking about the expansion of the new project at the launching ceremony Frehiwot said, “It opens a new chapter and brings an immediate impact on congested areas of telecom service.”
The project that was completed in one month is one of its three-year growth strategies, including data traffic growth, and demand-based 4G/LTE expansion around the country.
Over the next few months, the company has a plan to launch similar services in other parts of the country, for which preparation works are already underway.
Currently, at least 769 new sites are under development. Furthermore, she said that over 103 cities are earmarked under the company’s program to enjoy 4G/LTE advanced telecom services.
The company has 50.7 million subscribers and a geographic coverage of 85.4 percent at a national level.
The telecom provider, which aspires to become a preferred telecom operator among customers and partners in Ethiopia, also declared revenues of 25.5 billion birr in the first half of the current Ethiopian fiscal year, achieving 95 percent of its target.
The revenue marks a 12.3 percent increase compared to the same period last year.
During this period, a regulation enactment was also witnessed from the Council of Ministers that incorporated changes such as; the authorized capital increased to 400 billion birr from 40 billion birr, the go ahead to engage in Mobile Money and related digital finance services, permission to engage in other related activities including forming an entity and further gives the right to invest on equities locally and at international level.
On matters valuation, the company’s Asset valuation work has also been completed and total asset value has increased by 42% using IFRS reporting standards.
South Eastern Region receives LTE boost
EPDA faces slippery neglect by government
Ethiopian Petroleum Dealers Association (EPDA) blasts government and claims that the government has rejected to listen to them.
The leadership of the association that was formed in 1970s currently has 120 members of which the members are expressing neglect. They expressed that despite being at hot point in the petroleum business, the government hasn’t shown any interest in discussing with them the sector challenges that they are facing.
Henok Mekonnen, chair of the board of directors of EPDA, said that from time to time the sector has been facing massive challenges that lead dealers to change their activity to other businesses.
Meanwhile, the petroleum business that is strictly regulated by the government has had some changes in profit margin in the past couple of year in response to the several years claim by distributor companies and dealers problems.
The current profit margin per liter has expanded to 23 cents from three cents, while they claimed that their cost has been expanded by oil companies’ different charges.
On the press conference that was held on Friday February 19, the board members claimed that the government did not discuss with EPDA members on the new petroleum sales arrangement that will be started as of March 10, while the new scheme has been briefed for oil companies.
“Since we got the information, we have been trying our best to meet government officials at relevant offices that was unfruitful, due to that we are forced to call media and inform the situation,” Demise Shibeshi, a member of the board said expressing his frustration.
The new scheme will change the existing one month credit petroleum supply that is supplied by the state owned Ethiopian Petroleum Supply Enterprise (EPSE) to cash bases.
Similarly, some oil companies have informed their dealers on the distribution approach which will be on cash base as of the implementation period on the companies from the enterprise.
“We are calling the government to discuss about the issue before the implementation because it would create serious challenges on our operation,” Henok says, adding, “The time is fast approaching, while we are not prepared. We are not against the new cash base system but need more time for preparation and profit margin adjustment that shall fill the cost of access to finance that may be covered by over draft or bank guarantee.”
According to the previous study the association conducted to keep the sector safe, the safe line for profit margin stood at 80 cents or three percent profit margin from the total annual transaction.
They claimed that the current annual profit is one percent from the total transaction.
They also argued the decision of some oil companies who announced that the full cash based supply will be started as of March 10. “According to the new government decision the cash based supply of oil companies will be applied in different phases that will be concluded in a year’s time; for instance as of March 10, companies will come up with the payment of 25 percent on cash and increased by another 25 percent after three months and the balance continue under similar manner. But companies are informing dealers that they will pay the full amount as of the stated period,” Ephrem Tesfaye, member of the board at EPSE stated expressing his anger.
Ephrem elaborates that the study that was table shows how the sector is affected and poses discouragement of the actors and new entrants. “For instance the study shows that a dealer that has a daily trade of 15,000 liter gains 1.3 million birr gross profit from 133 million birr total transaction per annum, 350,000 birr and 200,000 birr from lubricant and other activities that is a total gross profit of 1.86 million, while their total cost is 2.15 million that shows that they loss 200,000 every year,” he claimed.
They have also argued that the current lubricant business that includes kiosks has also been affecting their activity which ought to be controlled by the government.
The association leaders said that they will disclose their decision after discussing with members if the government will not come up with a decision beforehand.
Currently there are 36 oil companies and 800 dealers in the country.
Tadesse Hailemariam, CEO of EPSE, recently told Capital that the upcoming arrangement will implicate a tariff change since companies are supposed to come up with cash.
Tadesse said that the new arrangement will improve the enterprise’s cash flow and working capital. “It will also cut the hassle that occurs when companies default to settle their payment on time,” he added.
The petroleum is now being supplied in a month credit but companies’ mainly new entrants abused the system, which forced EPSE to manage the case on legal battle.
The CEO said that the companies that recently joined the market are focused on the credit scheme than operating prudently. “The long existed companies and dominant market players on the sector are loyal and efficient compared with the new comers,” The CEO stated.
From the 36 oil companies only one third of them are loyal to settle the credit on time.
Fuels pricing and revisions are made by MoTI on a monthly basis. Lubricants and greases, however, are being directly imported by the oil companies with less margin control unlike petroleum.
New cooperative based housing scheme gains support
The Addis Ababa City Administration assures that it will support the new cooperative based housing scheme that is facilitated by Gojo Bridge Housing.
At the ceremony held at Hyatt Regency Hotel with the presence of Tiratu Beyene, Addis Ababa City Administration Manager and Deputy Mayor, and other city cabinet members, the project that will be commenced soon has been launched.
The new scheme that Gojo brings has invited landlords to come with their plots voluntarily to develop the property to different size apartments and interested co-builders to come up via hosing cooperative to secure houses.
Tiratu appreciated the convincing idea that led the city administration to accept the alternative on the housing scheme from the current condo projects lead by the government and private real estate developers.
He echoed that there is a huge mismatch between the demand and supply which is further burdened by mass migration to the city which presents an influx of new and more demand.
He reminded that over 600,000 dwellers are saving and waiting for house under the 20/80 and 40/60 condo housing scheme and says that the problem is stretching.
Tiratu explained that the issue will not be able to be covered by the government alone and as a result the real estate developers and other companies are expected to bring this project to a success.
“But there are issues on prudency and accountability on the private real estate activity that however should be stopped and will not be the case with this scheme,” he said expressing his hope that the new scheme that Gojo brings will change the dynamism.
According to the Gojo model, the cooperatives that would assign contractors will be responsible for the project that Almaw Gari, General Manager of Gojo Bridge Housing, said will make easy the concern of the city administration and the builders.
The City Manager stressed that the Gojo modality should be inclusive of new technologies that aim to make the projects’ cost effective and finalized in a short period. He emphasized that his government has appreciated the idea and will support the initiative.
The city administration has also appreciated the initiative that will restore the old face of the city with new and modern images in conjunction with the government.
Nadew Getahun, Founder and Deputy General Manager of Gojo Bridge Housing, said that in the past two years the company has been in the process to come up with this point. He said that 2,800 landlords and over 2 million square meter of land have been registered for the new development scheme.
He said that the schematic designs have been conducted by five companies and contractors have also been selected that builders will assign.
Almaw said that the project will also have a financial support modality which will take one and half year to realize.
He said that so far four banks; Dashen, Commercial Bank of Ethiopia, Awash and Oromia International Bank have agreed to work on the new scheme including providing finance for projects that will be settled by builders under mortgage scheme.
Almaw said the model mainly focus on middle and low income part of the society.
Nadew indicated that the project cost will be minimal since the charges that are requested by real estate developers is not applied on this scheme and the interior finishing work will be managed by the house owner itself.
On the new projects 1,000 houses in four sites that are located in Goro, Bulgaria Embassy, Italy Embassy and Lancia will be constructed, while in the coming five years Gojo expects 100,000 houses to be built.
According to the founder of Gojo one of the best advantages of the new scheme is undertaking projects at the centre of the city, which has been developed on basic infrastructure.
Gojo has also designed the rotating money and saving scheme that will be an instrument for the diaspora to save small amounts of money every month for several years which will allow building houses on sharing arrangement. Nadew said that rotating money and saving scheme that is common in other countries and will help the country to secure significant amount of foreign currency for decades.
Tsehay Bank
Tsehay Bank, one of the under formation banks, held its first establishment general assembly at Sheraton Hotel last Thursday, February 18. The Bank had received permission from the Central Bank to begin selling shares last year in October 2020.
The organizing committee decided to go for the lowest share sell to be 100,000 birr whilst the highest a shareholder can buy was 100 million birr.
The Bank has amassed almost 735 million birr in paid-up capital from a total of 2.9 billion birr subscribed shares through 373 shareholders.
Tsehay Bank is among around a dozen banks that are currently under formation in the country.
