Ethio Telecom reveals financial results, subscriber data for most recent financial year

Mergers, Acquisitions and Financial Results

Ethiopian incumbent telco Ethio Telecom (formerly Ethiopian Telecom Corporation) has revealed that it missed its revenue target of ETB9.8 billion (USD565 million) for the year ended 7 July 2011 by a shortfall of 11%, reports. With France Telecom (FT) having taken over management of the state-owned telco in December 2010, the failure to hit the target could mean that the European telecoms giant may see its management fee reduced under the terms of its contract with the Ethiopian government. It is understood that under the terms of the two-year, USD42.3 million agreement between FT and the state, the payment scheme is contingent upon a six-monthly performance review, with bonuses or deductions based on a percentage accomplishment of goals set as part of the deal.

In a press release detailing the achievements of the most recent financial year, Ethio Telecom reported that gross turnover had increased from ETB7.05 billion in EFY2002 (the period from 8 July 2009 to 7 July 2010) to ETB8.815 billion in the same period a year later, while earnings before interest, tax, depreciation and amortisation (EBITDA) in EFY2003 (year ended 7 July 2011) stood at ETB6.83 billion. The failure to reach its revenue target was reportedly blamed on damages to the company’s telecoms infrastructure, with allAfrica citing an unnamed telecom official close to the matter as saying: ‘The cost of repairing stolen fibre-optic cables and power shortages are some of the reasons why the company did not reach its target.’ Ethio Telecom reportedly confirmed a few weeks ago that it had lost around ETB91 million due to theft and intentional damage of its infrastructure.

Ethio Telecom also revealed that the number of subscribers across all of its services had reached 11,509,366 at the end of June 2011, of which the lion’s share – 10,526,190 – were attributed to mobile services. The number of customers signed up to the telco’s fixed line voice and internet/data services stood at 854,412 and 128,764 respectively, although only 16,529 of the latter were connected to high speed internet services such as ADSL or 3G mobile broadband. Looking forward Ethio Telecom has set out an extremely ambitious target, announcing that it aims to add some ten million new mobile subscribers in the coming year.