This report covers the performance period from July 2018 to June 2019.

This annual performance report has been reviewed and validated by Ethio telecom management and Board of Directors. During the two reviews – the reform interventions, achievements and the  performance was assessed in light of the planned action, in comparison with the previous budget year and the trend in the telecom industry as well as business environment. The company’s annual strengths, limitations, gaps and identified challenges were discussed and the way forward has been established.

With massive tariff discounts, ranging on average from 40% to 50%, Ethio telecom generated 36.3 Billion ETB revenue, which is 85% of the target showing 7% increment from the previous budget year. In the budget year, EBITDA amount earned is 24.5 Billion ETB, which is 79% of the target and shows 5.6% increment from the previous budget year.

Ethio telecom paid 16.2 Billion-birr tax, of which 4.7 Billion ETB being tax arrears. The tax amount paid shows 40% growth from the previous budget year. In this regard, the tax contribution of Ethio telecom accounts 18.8% of the total tax collected from the large tax payers in the country during this budget year which amounted to 85.9 Billion ETB. In addition Ethio telecom has paid 7 Billion ETB in dividend, out of which the 1 Billion is a pre-payment.

The company scored a remarkable achievement in loan repayment, by paying 9.9 Billion ETB equivalent to 362 Million USD. The lion share from this payment is an amount of loan arrears accumulated for the last three years.

Ethio telecom total subscribers have reached 43.6 million which is 95 % of the target and an increase of 15% from the previous budget year. This figure results tele-density of 44.5%. Mobile voice subscribers are 41.92 Million, Data and Internet users 22.3 Million and Fixed Services 1.2 Million.

Drastic tariff discounts ranging from 40%-50% have been made in all products and services with the objective of ensuring affordability, enhancing service usage and customer satisfaction. With this discount, traffic has increased in a remarkable rate of 130% in data usage and 19% in voice. Furthermore, due to various business and technical interventions, international incoming traffic has increased by more than 50% which was declining consistently in the previous years. It is worth mentioning that the increased traffic has been accommodated with the existing resource with minimal additional investment, optimization, resource reshuffling, relocation and parameter adjustment.

The budget year commenced with assessing the Strength, Weakness, Opportunities and Threats of the company by going through working units. Following the assessment, the leadership has set priority that will help it to attain objectives set in the yearly plan. The assessment served as a base and an input for multiple reform interventions.

Leadership capacity, people management, capacity development, organization restructure, partnership management, work environment enhancement, property and resource management, operational efficiency, improvement and strategy execution were the areas of the reform measures. The company management members were empowered to make timely decision and risk taking. The management were also given trainings, visiting opportunities, mentoring, business orientation and knowledge sharing. There have been many interventions to prepare the staff and management for the upcoming change in market structure thereby nurturing competitive mindset, work discipline and business orientation.

By making the company human centric- employees were able to benefit from various interventions including capacity development, career progression, work environment enhancement and safe and healthy working conditions, employee engagement, working hour adjustment, benefit package revision, provision of working tools, enhancement of social relations and grievance handling.

Partner and stakeholder engagement and management that aimed at ensuring win-win business relations and long lasting engagement was also put in place.

This measure helped Ethio telecom to regain trust, to run smooth business relationships and operations, an increase in the interest to engage and to partner with Ethio telecom. One of the major achievements were made with the Chinese Financial institutions that showed willingness to work and negotiate loan related issues directly with Ethio telecom.

The reform measures also incorporated a well- designed and strategic corporate social responsibility interventions. Accordingly, Ethio telecom has contributed more than 300 million birr as part of delivering its corporate social responsibility. Expressing its citizenship, Ethio telecom participated in social program such as children, youth, women, elders support and assisted projects – education , health, agriculture and environmental protection.

Fiber and copper cable vandalism, telecom fraud and OTT, and commercial power interruption were among the main challenges the company has faced during the budget year.

Conclusion

Ethio telecom has achieved remarkable results in the budget year while undergoing reform measures and resolving significant backlog issues.

The achievements and the reform process the company passed through are stepping stones to be competitive in the future telecom market. The achievements and the reform transformed the company to a better position in comparison with the previous budget year that ended with positioning the company in a risk zone by its Board.

The leadership has exerted extra effort and commitment with full ownership to achieve the company’s target despite challenging business environment.

Thanking the Ethio telecom Board of Directors, our employees, customers, partners and stakeholders for such good performance, we are glad to announce that the budget year was closed with a significant net positive cash position despite drastic tariff discounts and clearing significant amount of back log loan repayments and other service payments.