Ethio-Telecom Limits Evdo Internet Access

Telecoms

Ethio-Telecom (the new brand name for incumbent ETC) stopped making unlimited EVDO Internet access available to customers on Friday, April 1, 2011. The announcement of the revised packages and new products was made on Wednesday, March 30, by the service provider at a press conference held by Abdurahim Ahmed, manager of external communications, and Jean Michel Latute, CEO, both from Ethio-Telecom. The former is the France Telecom manager bought in to provide strategic management to the company.
 
The new EVDO packaging and pricing system does away with the former unlimited service package. Instead, it offers packages of one, two, and four gigabytes at monthly charges of 300 Br, 500 Br, and 700 Br, respectively. Once this runs out, customers must pay 35 cents per megabyte of use.

The former unlimited EVDO service package of 4,000 Br per month allowed the customers of the Internet café managed by Zelalem Belay to see and download unlimited amounts of software, pictures, and videos. However, even the comparatively cheaper 4GB package will cost the café more, according to Zelalem.

"The monthly charge for the package, which amounts to around 18 cents per megabyte, may seem cheap, but many of our customers download various materials that take up a lot of memory," he told Fortune. "With this new tariff package, we must restrict our users' ability to download memory exhaustive programmes or charge them a combined price system for the time spent and data transfer rate."

"With our sizeable number of customers, the four gigabytes could be finished in few days," Zelalem said. "It would be costly to buy 100 Br Internet cards at 35 cents per megabyte for weeks until the next month."

Yet, the service provider's network problems persist. "We have been receiving complaints about the slow Internet connection the country is experiencing and the unavailability of Internet services on most mobile phones," Latute said. "Ethio-Telecom is increasing the security of Internet traffic through a microwave system as a national backup plan, to cope with Internet outages, that will be finished by August or September this year."

Ethio-Telecom is to expand the Internet fibre optic system routes in addition to the ones already laid on the Port Sudan-Metema-Addis Abeba and Djibouti-Addis Abeba routes.
There will be one additional line added to the Djibouti route and another one between Mombassa and Addis Abeba by the end of April 2011, Latute confirmed.

Aside from the revised Internet packages, new tariffs for mobile phone services, mobile SIM cards, and replacement SIM cards were introduced. Ethio-Telecom has adjusted its tariff rate to introduce a new flat rate for mobile phone calls of 72 cents during peak hours and 30 cents during off-peak hours. Unlike the previous structure, the new tariff rate allows no price difference linked to tariff zones across the country.

As of Friday, all costs for calls from mobile to mobile, mobile to fixed line, and fixed line to mobile are uniform whether it is a long or short distance call - charging all national calls at the same price as local calls.

The fixed rate would benefit Gebresha Ergete, who works as a guard, since he has a Dire Dawa mobile number. Living in Addis Abeba made most of his calls more expensive for being charged as "long-distance," but with the rate adjustment, the amount he spends on mobile cards should decrease substantially, he claimed. "The new system of charging flat rates is efficient and cost-effective for the user," Latute told the press.

Baheria Mustefa, a shopkeeper who has a call centre, hopes that the changes in the tariffs will also be beneficial to her business. "My call centre charges a uniform price of 1.50 Br per minute, whether the call is made to a mobile phone or fixed line of whatever tariff region," she told Fortune. "To date, it has been operating at a loss, and I hope it will change when next month's telephone bill arrives."

The new price for mobile phone SIM cards has been reduced by 30pc from the previous 85 Br to 60 Br, inclusive of VAT. However, the fee to replace a SIM card that has been stolen or gone missing will be increased from 15 Br to 45 Br.

Abdurahim admitted that the increase was business oriented. "The enterprise has two objectives," he said. "One is developmental and the other focuses on business. It has to cover its losses and make a profit, too."

However, Fire Dawit, a temporary supervisor at Commercial Nominees, which sells SIM cards and airtime, does not expect a rush of customers because of the sudden price decrease in new SIM cards. "Most people already have SIM cards, even those who wanted a second one, after the previous adjustment to 85 Br per SIM card," she told Fortune. "Sales could increase after the Preparatory Exams since parents nowadays shower their children with mobile phone as gifts for succeeding in their academic careers."

The tariff revisions are being touted by Ethio-Telecom as a move towards making Ethiopia's rates the lowest among countries in East Africa. Ethiopia's fixed line tariff is one of the lowest in Africa, according to the International Telecommunications Union's (ITU) 2010 African Telecom Indicator.