Ethiopia: Drops in Landline Tariffs for Peak Hours, Off-Peak Hours but from high level


Alarmed by the marginal increment in landline subscribers and a revenue shortfall from the targeted 9.8 billion Br of its operations last year, ethio telecom has reduced tariffs across zones for telephone calls made from landlines, beginning January 1, 2012.

The number of fixed line subscribers in Ethiopia is slow to grow compared to mobile, increasing by 37pc since 2005. Despite being launched over a centaury ago, landline subscriber numbers reached only 836,000 last year, while mobile users reached 10.5 million in 2011, up 931pc from only six years ago.

Managers at ethio telecom, contracted from Orange Telecom of France, want to change such marginal growth. In their bid to increase both the number of calls and their durations, they have reduced tariffs, for the first time, for peak hours, from 7:00am to 9:00pm, by 66.3pc to 83 cents on the Birr a minute.

A more significant reduction is seen in off peak hours, including during weekends and holidays. Calls during these periods will be charged 35 cents a minute, dropping by a whopping 228pc.

"This is to encourage subscribers to use it more frequently than they used to, which, in turn, increases the revenues of the company," Abdurahim Ahmed, public communications head at ethio telecom, told Fortune. "The traffic from subscribers making calls is the way to generate more revenue."

This is part of the new business plan of the telecom service monopoly of the country that took over the former Ethiopian Telecommunications Corporation (ETC), two years ago, for 42.3 million dollars.

"The aim is to avoid the price variations of calls in town and out-of-town," Abdurahim told Fortune.

ethio telecom only charges 20 cents for six minutes in town, below even the tariff rate for calls from its public phones that are charged the same price for three minutes. The number of public payphones in operation was only 5,025, as of September 2009. Despite recent efforts to register and license public phone call providers, the majority of kiosk phones are not regulated, according to the Ethiopia ICT Sector Performance Review 2009/2010.