Mergers, Acquisitions and Financial Results

The annual profit anticipated by the state telecom monopoly, the Ethiopian Telecommunications Corporation (ETC) is down by 40.8 million Br (USD4.9m) for the years 2003/04, when compared to the previous year.

Although the final auditing remains to be conducted, after statements were collected from the Company's district offices, officials announced that last year's profit will stand at 331.2 million Br. This amount is even worse compared to what was planned. Their performance was 47pc lower.

"We had been ambitious," admitted ETC's Managing Director, Tesfaye Birru, at a press conference held in his office earlier this month.

The management had planned to install 170,130 landline telephones, but only managed to provide to 95,131 homes. In mobile provision, its target of selling 350,000 SIM cards ran short by 100,000. Even those with mobile connections are still complaining about the quality of its service, which suffers from call terminations, a busy network, and lack of clarity.

ETC's managers pledged at the press conference that they are trying hard to solve the problems, together with their equipment suppliers, the Swedish Ericsson and the Chinese ZTE.

ETC was even poor at spending its budget last year. Of the 2.6 billion Br capital budget it had allocated, only 1.2 billion Br was spent."It was more a year of planning than results," said Abayneh Abebe, deputy manager in charge of Telecom Business Services Department.

He admitted that the effort made to implement the civil service reform programme, prescribed by the federal government in a bid to enable such companies provide expedient services to the public, has achieved hardly any results. Abayneh criticized the management for "deceiving itself" in a hope that the lower rank and file of the Corporation had been as reformed as the leadership."It was a year where employees of the Corporation failed to realize that they are here to serve the public," he said.

Tesfaye on the other hand argued that although last year's profit was lower compared to the "ambitious plans", it was, nonetheless, a record year in terms of accomplishments. ETC had a positive year in terms of its revenue which grew by 130 million Br to 1.13 billion Br. Its asset increased to a total of 3.9 billion Br from the 3.1 billion Br in the previous year.

The Corporation also claimed to have registered results in urban network installation, accomplishing 95pc of its target to install 131,637 lines. The management also prided itself for successfully networking 401 schools of the 450 originally planned to be connected through video conferencing. Among the 600 woredas which it had planned to connect in a similar way, it had completed wiring up to 495 of them.

However, a report by this newspaper two weeks ago disclosed that the much anticipated connections of these woreda's through a live satellite link failed during its trail phase. ETC claims to have drawn considerable lessons from last year's experience. A particular area was related to the manner in which it conducted the procurement of goods and services. The Managing Director disclosed that the Corporation will no longer make procurements after the first quarter of the budget year.

For the year 2004/05, ETC has budgeted a record high of 4.2 billion Br to be spent on developing its backbone infrastructure that could install 3,198Km of optical fibre. This installation, intended to help the Corporation provide telephone services to 3,000 kebeles across the country, will be stretched in six directions: Dire Dawa to Djibouti, Dessie to Mekelle, Bahir Dar to Nekemte and Jimma to Awassa.

The Corporation plans to expand landline telephones by 250,000 lines, mobiles to 850,000, internet to 40,000, and 220 additional services for data during the year.

ETC also plans to install microwave technology in Harar, Bale, Arsi, Shashamene, Arba Minch and Addis Abeba, disclosed its managers. The managers have also vowed to fight those whom they allege are practicing illegal internet telephony, creating a new organization, the Network Operation Center.ETC has a total of 180,000 mobile subscribers, 14,000 internet users and 470,000 telephone lines in the country.

Addis Fortune