The operator reported an 18.4% rise in full year revenue, in spite of internet shut downs related to civil unrest in the Tigray region
At the start of Ethio Telecom’s financial year, back in July 2020, the internet was in the midst of a government-mandated two-week internet blackout, following protests in the capital, Addis Ababa.
Since then, ongoing violent unrest in Ethiopia’s northern Tigray region has left scores dead and the country in a state of political unease.
But against this volatile backdrop, Prime Minister Abiy Ahmed has advanced plans to liberalise Ethiopia’s telecoms industry, preparing to allocate licences for two new entrants into the rapidly growing market.
The first of these licences was allocated to a Safaricom-led consortium in May for around $850 million. The second licence, however, went unsold, after bidders dropped out citing market uncertainty and restrictions around the launch of mobile money services. In the end, MTN was the only bidder for the second licence, but the regulator decided that their bid was too low, instead drafting plans to retender the licence in the near future.
As part of this ongoing liberalisation process, last month Ethio Telecom launched a much-anticipated tender process for the sale of a 40% stake in the government-owned telecom.
Now, positive end-of-year financial figures being reported this week could see sale price for this stake increase, with Ethio Telecom reporting an 18.4% increase in full year revenue to around $1.29 billion.
The company also recorded a 22% increase in mobile subscribers, up to 56.2 million.
For Ethio Telecom’s CEO Frehiwot Tamiru, much of this gain can be explained by the expansion of 4G services beyond the capital.
"When we started the budget year the internet was shutdown and we lost billions because of this. And the crisis in the northern region [Tigray] was also something we didn’t anticipate," she said.
May also saw Ethio Telecom launch the country’s first mobile money service, Telebirr, aiming to replicate the success of similar platforms like M-Pesa in Kenya. Within a week, Telebirr had reportedly accrued over a million subscribers; now, Frehiwot says this figure has risen to 6.58 million people.
It goes without saying that Ethiopia is a mobile market with huge potential for expansion and the rapid growth of Ethio Telecom’s mobile money platform could be hugely enticing for investors. On the other hand, the continued civil unrest makes investing that much more risky.
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