This report covers the performance period from July 2024 to December 2024.
Cognizant of the relevance and multiple active roles Ethio telecom has in our country’s overall social and economic progress and prosperity as well as in the improvement of the citizens’ lives, our company has been undertaking a wide range of projects and operations to expand and upgrade telecom infrastructures and systems, improve the quality of service and increase the outreach of benefits to the community in alignment with the fast and dynamic telecom market to meet the growing demand for telecom services.
Our company is playing its enabling and remarkable role for accelerating the overall progress of our society and prosperity of our country and realize digital Ethiopia by utilizing smart technologies being cognizant of the dynamism of the telecom sector. To achieve this vision, our company’s three-year lead strategy has been implemented diligently;and this fiscal year is the final year of the strategy period.
In the first half of this budget year, our company has made significant strides, including improving overall customer experience, expanding service accessibility and quality, diversifying and increasing revenue streams, strengthening financial capacity, and achieving operational excellence. We’ve also enhanced network and digital infrastructure, launched cutting-edge new services, and optimized resource utilization. Our efforts to ensure digital financial service inclusion and improve access to digital payment services have been key priorities. Furthermore, we’ve focused on empowering our workforce, equipping them with the skills needed to design and implement innovative solutions and adapted to macro-economic reforms and worked on telecom fraud prevention strategies to safeguard the company’s security.
INCREASING NUMBER OF TELECOM SUBSCRIBERS
During the first half of the budget year, our total subscribers reached 80.5 million achieving 100% of the subscriber base target. This increment indicated an increase of 5.9 million or 7.9% compared to the same period of the previous budget year. When seen in terms of service types, Mobile voice subscribers reached 77.7 million, mobile data and internet users 43.5 million, fixed broadband 784.1 thousand, fixed Voice 765.6 thousand. In line with this, elecom density has reached 72.2%.
This performance in customer base is realized through the network and system infrastructures expansion and optimization works, the release of new products and services, the expansion of more service centers and engagement of more distributors/partners; a total of 9.3 million new SIM cards were sold, which indicates an increase of 8% compared to the same period of the previous budget year and a performance of 113% has been achieved compared to the fiscal year’s plan.
AFRICAN FIRST (1ST) OPERATOR
Our company has earned recognition for its remarkable efforts in expanding cutting-edge digital infrastructure nationwide, driving a substantial increase in our customer base. According to a recent GSMA study, Ethio telecom ranks 1st in Africa and 17th globally.
This outstanding achievement not only enhances our company’s global presence but but also reinforces stakeholder trust and enhances our strategic influence on the international stage.
INCREASING PRODUCTS AND SERVICES
During the half budget year, our company was able to offer a total of 171 local and international products and services (62 new and 109 revamped) in order to expand and enhance its products and services that increase customer utilization of telecom services and enhance their experience, simplify the lives of customers, more enhancing the efficiency and effectiveness of the enterprise customers by modernizing their day-to-day work operations, as well as benefit the society from the digital economy.
In the first half of the budget year, to improve accessibility of our products and services, our company opened 68 additional service centers in areas and cities with accessibility gaps, bringing the total number of service centers to 1000, with 513 being franchised and 487 are owned by our company. Furthermore, in line with the distribution strategy implemented by Ethio telecom, 64 main distributors, 43 virtual top-up distributors, 12.7 thousand sub-distributors, and 290.6 thousand retailers are engaged in the sales related activities. As a result, the total number of partners increased to 303.4 thousand.
MOBILE NETWORK COVERAGE AND CAPACITY
In the first half of the budget year, 202 new mobile stations were successfully deployed and are now operational, enhancing the quality and accessibility of customer service. With an additional 4.6 million in mobile network capacity, the company has increased its total mobile network capacity from 86.1 million to 90.7 million. Our mobile network expansion initiatives include cutting-edge technologies such as ultra-fast 5G, Massive MIMO, 4G LTE, 3G, and 2G services. As a result, 67 more cities now have access to 4G, while 10 cities have been enabled with 5G connectivity. RURAL CONNECTIVITY SERVICES
Our company is undertaking a comprehensive rural connectivity project to extend telecom services to remote rural kebeles and villages that currently lack access and help bridge the digital divide between rural and urban areas.
To enhance inclusive access to digital services and drive sustainable development and economic growth, substantial progress has been achieved over the past six months. A total of 81 rural mobile network sites have been established across 71 woredas in nine Regional States. In total, 295 sites have been successfully implemented across 231 woredas in twelve Regional States.
FIXED NETWORK CAPACITY AND QUALITY
Moreover, our company has deployed 133,672 customer accommodation capacity through Optical Distribution Network (ODN) to expand fiber access, enhance network quality, and increase capacity. This brings our total ODN customer accommodation capacity to 769,932.
As part of our ongoing “Copper Switch-off Initiative” which plays a crucial role in accelerating the nation’s digital transformation and development, we have successfully migrated 18,300 customer connections from copper to fiber, out of the 100,000 planned for the budget year. This not only enables our customers to access high-speed internet and data services but also plays a crucial role in accelerating the country’s digital transformation and comprehensive national development.
RESTORATION AND RESUMPTION OF SERVICES
Significant efforts have been undertaken to restore telecom services in areas previously disrupted due to security-related challenges. To facilitate this, essential telecom equipment, commercial materials, and critical supplies for service centers have been collected from various company offices, thereby enabling the resumption of telecom service operations.
As a result, large-scale restoration work has been successfully completed in 216 kebeles across the Oromia, Amhara, Tigray, Benishangul-Gumuz, and Afar regions. A total of 231 mobile sites have been repaired and brought back into operation and allowed service restoration. This initiative has reconnected both individual and business customers in 100 towns and districts and ensured they can once again access and benefit from telecom services.
BUILDING AND MODERNIZING DIGITAL INFRASTRUCTURES
Developing and Upgrading Systems
Our company is focused on expanding access to the latest technology products and services that significantly enhance the community’s overall quality of life. Specifically, we are implementing innovative technologies and digital solutions that modernize institutional operations and provide customers with fast, convenient services. These include Enterprise Solutions, the expansion of Mobile Money and Digital Financial Services, Cloud Services, Security Solutions, Operations Support, and Corporate Solutions, all of which enable the delivery of new services.
Data Center & Cloud Service
In alignment with the government’s efforts to realize the Digital Ethiopia vision and in response to the growing demand for data center and cloud services, our company has expanded its two data centers, increasing capacity to 112 IT racks/896kW IT load. This brings our total data center capacity to 4.2MW IT load/512 IT racks. The Cloud Infrastructure Expansion Project, which plays a key role in advancing our country’s digital transformation and enabling institutions to digitize their operations, has been successfully implemented. As a result, in the first half of the fiscal year, elastic compute capacity has grown from 3,072 vCPU to 16,768 vCPU, and storage capacity has increased from 1.3 PB to 4.58 PB.
INTERNATIONAL CONNECTIVITY
During the first half of the fiscal year, we expanded our international connectivity capacity by an additional 190 Gbps through strategic partnerships with Sudan, Djibouti, Kenya, and Somaliland, bringing the total capacity to 1.83 terabits per second (TBps). Furthermore, we have signed a Memorandum of Understanding (MOU) with Djibouti Telecom and Sudatel Telecom Group for the Multi-Terabit Horizon Fiber Initiative, a groundbreaking project that will position Eastern Africa as a key player in the global digital landscape.
Moreover, alongside partnerships with Google and Meta-Facebook, we implemented a 40Gbps cache service with Netflix to enhance speed by locally hosting the most visited content by our customers.
REVENUE INCREASE
In the first half of the fiscal year, we have launched a variety of products and services designed to accelerate the country’s digital transformation. Through large-scale infrastructure expansion, we have significantly improved network quality and accessibility, helping to address key societal challenges, enhance quality of life, drive telecom service adoption, and enhance the customer experience. Moreover, these efforts have increased business productivity and strengthened the nation’s overall competitiveness.
As a result, according to our preliminary half-year financial report, our company has generated 61.9 billion ETB in total revenue, achieving 90.7% of the target. Moreover, revenue from international services has reached 64.4 million USD, achieving 63.8% of the target.
This revenue growth has been primarily fueled by a sharp increase in mobile data usage, which has reached 642.2 billion MB, reflecting a 48.8% rise compared to the same period last fiscal year. Likewise, mobile voice services have expanded to 83.6 billion minutes, registering a 12.7% increase. These achievements have played a pivotal role in reinforcing our company’s financial performance.
TELEBIRR FOR THE DIGITAL ECONOMY
In the first half of the budget year, we successfully registered 5 million new customers, bringing the total number of telebirr customers to over 51.5 million, achieving 99.8% of our target. During the first half of the budget year, 1.03 trillion birr electronic money transaction was made via telebirr. Since the launch of the service, a total of 3.58 trillion ETB in electronic money transactions have been mobilized across the economy and make financial transfers more inclusive and accessible by igitalizing financial services.
FOREIGN EXCHANGE
During the first half of the budget year, our company implemented various initiatives to generate foreign exchange. As a result, our foreign exchange earnings totaled $72.6 million, achieving 58.7% of our target. Of this, $67.36 million was generated from international services, while $5.24 million was obtained through telebirr’s international remittance services which enables money transfers from overseas into the country.
FINANCIAL STATEMENTS (UNAUDITED STATEMENTS)
Based on our company’s financial report (which is yet to be audited), we achieved a profit of 32.82 billion ETB in Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA), along with an increase in the unaudited profitability margin to 55.6%, reaching 179.9% of our target. In addition, we paid 23.74 billion ETB in taxes to the government and repaid $15,405,770.24 or 1,820,038,440.37 ETB in foreign loans over the past six months.
At the beginning of the fiscal year, following the government’s macroeconomic policy reforms and the shift to a market-driven foreign exchange system, our company faced significant currency depreciation due to its heavy reliance on foreign currency for investments, To address this, we implemented a balanced pricing adjustment strategy aimed at sustaining service delivery, supporting reinvestment, and maintaining high-quality services for our customers. This was reinforced by efforts to drive revenue growth, enhance cost efficiency, and adopt pragmatic financial management practices.
The pricing adjustment was thoroughly structured, taking into account customers’ ability to pay, rising service provision costs, and the necessity of ensuring service continuity. Given the substantial currency fluctuations, the increased costs were absorbed selectively, impacting only specific services. Moreover, in line with affordability, economic challenges, and inclusivity principles, no price adjustments were made for 43% of services, primarily those with lower tariffs and a broad customer base.
AUDIT REPORT
To ensure the financial health of our company, the financial report up to June 30, 2024 fiscal year was prepared in accordance with International Financial Reporting Standards (IFRS). Following an external audit, the report was reviewed and confirmed to be unqualified indicating no discrepancies.
FOSTERING A CULTURE OF COST SAVINGS
Our DO2SAVE cost optimization strategy achieved remarkable results, saving over 3.5 billion ETB in the first half of the budget year, reaching 144% of our target. This success can be attributed to effective resource utilization strategies, strong collaboration with partners, and the digitization of day-to-day operations.
CYBERSECURITY
In the first half of the budget year, our company focused on enhancing human resource capacity, modernizing procedures, and equipping itself with the latest technologies to effectively address the rapidly evolving cyber threats. This proactive approach helped prevent potential damage from data breaches, service interruptions, and revenue losses. Through the implementation of new control mechanisms to counter cyber-attacks, we successfully deterred over 266,162 attempted cyber-attacks before they could cause any harm.
DIGITAL ID REGISTRATION
Our company has been actively implementing the national digital registration system and has been progressing according to the project timelines for its completion. Since April 2024, the project has made significant strides and is contributing to the realization of the Digital Ethiopia vision by expanding its reach across the nation.
To date, 5.7 million customers have been successfully registered, with 5.1 million of these customers benefiting from the services and gaining awareness. During the first half of the budget year, 4.2 million customers were registered. On average, 27,000 individuals are being registered daily across 12 Regions, 2 city administrations, over 275 regional cities and woredas. This progress has been made possible through 444 registration centers and 304 mobile teams.
HUMAN RESOURCE CAPACITY BUILDING
Efforts to build human resource capacity have been focused on creating a conducive work environment and enhancing staff execution and implementation skills to ensure continuous growth in a competitive market. This includes equipping employees with the necessary knowledge, skills, and a positive work culture. As part of these efforts, we provided training to 26,505 employees through a program designed to strengthen the company’s working culture, improve customer service, and align ethics with the company’s growth. Furthermore, 26 employees have received certification in various areas, with 246 more currently in the process. A survey conducted on the effectiveness of the training revealed a 93% success rate, confirming that the training met its intended targets. In the first half of the fiscal year, our CEO also led a series of strategic workshops attended by senior management, focusing on improving project performance, resource utilization, and operational system enhancements. The main goal of these workshops was to improve the efficiency and excellence of project execution, develop strategies for optimizing resource utilization, and elevate operational efficiency and excellence within the company.
JOB CREATION OPPORTUNITY
In addition to its national contributions toward development, our company plays a vital role in creating a wide range of job and income opportunities for citizens. This includes providing both permanent and temporary employment to individuals involved as distributors of products and services, partners, and in other activities. Currently, the company has 16,564 permanent employees, with 11,870 (72%) men and 4,694 (28%) women. There are also 23,173 temporary (contract) employees, the majority of whom work as security personnel. Regarding partnerships, the company has over 347,000 business partners, with 303,300 of them serving as distributors of our products and services.
CORPORATE SOCIAL RESPONSIBILITY
Our company is committed to making a long-term positive impact through various charitable initiatives that contribute to the betterment of society, focusing on key areas such as education, healthcare, environmental protection, green development, and beautification projects that can strengthen the long-term development of the society by identifying key areas of focus.
In the first half of the fiscal year, our company contributed a total of 287.2 million ETB to corporate social responsibility (CSR) efforts, which includes 131.3 million ETB in-kind donations and 155.9 million ETB in cash to education, healthcare, humanitarian aid, environmental protection and green development, and national projects.
We also remain deeply committed to environmental protection and the Green Legacy program, organizing our employees and partners to plant seedlings nationwide. As part of this initiative, we successfully planted more than 446,000 seedlings across 105 locations during the sixth round of the seefling plantation program.
In addition to corporate donations, our employees have demonstrated remarkable commitment by making voluntary contributions, identifying economically disadvantaged communities and providing in cash, various materials, blood donations and offering goodwill services.
INTERNATIONAL ACCREDITATION
During the first half of the budget year, we successfully obtained international certifications for ISO 27001:2022, PCI DSS, and Cloud Security Alliance (CSA) for both telebirr and Telecloud. These international certifications not only validate our company’s ability to meet its responsibilities but also serve as a foundation for realizing our vision of becoming a leading provider of digital solutions.
This strengthens the confidence our customers, partners, and stakeholders place in our services. Our unwavering focus on providing top-tier, internationally recognized services underscores our commitment to being a leader in digital ecosystem.
Finally, we would like to extend our heartfelt gratitude to our employees, customers, business partners, product and service distributors, suppliers, vendors, media partners and other stakeholders who played key roles for our remarkable business performance in the first half of the budget year.
February 12, 2025
Ethio telecom