There is no doubt that your corporation is essential for the development of Ethiopia. Could you then give to our readers a brief historical background of ETC?
The Ethiopian Telecommunication started business in 1894. It operated in corporation with the Japanese government for the introductory part. Unfortunately, its development was interrupted during the Italian aggression, from 1935-40. Before the Italian aggression, the major cities were already connected, with the wire technology of that time. However, all the telecommunication infrastructure was destroyed by the Italian aggression. After independence, we started again to build the infrastructure with the assistance of the World Bank. There was a big program called the rehabilitation program of Ethiopian Telecommunication infrastructure. In the history, that was the big achievement of our sector. For instance, we have been members of international telecommunication union in 1932, when most of the African countries were still under colony. In that membership, we have played the part for Ethiopia, and also for the African region. In 1953 the telecommunication was rated from the Postal office, and was established as a autonomous entity with a board. At that time the enterprise was free to plan, implement and execute anything concerning telecommunication. It went through that way until the Marxist government took power. Consequently, the military dictatorship was installed, and ruled the country for 17 years. During that long period, we have only implemented one development program called the sixth development program. For comparison, during the rehabilitation program, 5 consecutive development programs were implemented. Starting from its establishment, in 1894 until the end of the Derg regime, we had only managed to have160 000 subscribers. Then the provisional government of the existing system took power in 1991, and started to introduce a rehabilitation program. The aim of this program was to reconstruct the telecommunication infrastructure of the Northern part of the country, that was mostly destroyed by the civil war. This rehabilitation program was completed in three years period. Afterwards, we started the seventh development program, that is a big project. Anyway, historically, telecommunication has been operating for about 205 years, but due to various reasons, its development is very insignificant. Fortunately, matters are really changing now.
Coming to the development program, could you mention some of your main guidelines, specially concerning the rural areas?
The overall policy of the country is to give emphasis for the rural areas, and this has many advantages. During the past periods, the rural areas were totally forgotten. They were not given the opportunity to participate in modern technology. In our development program, we will try to reach the most remote areas, to give them service, and to ensure that people should not travel anymore a long distance to get any telephone service. We have purchased Bisants, and Garma systems that will enable us to give the remote areas voices, data, and television transmissions. These systems will be connected with the central Hab system, found in Addis Ababa. We have already installed them in about 25 remote areas, and are working perfectly. To conclude, our program main objective is not only to focus on the rural areas but also to balance the difference between the big cities and the rural areas. As the telecommunication sector needs capital in order to expand, there exists a cross subsidy system in the rural areas, and the expansions of many big cities are also considered.
How do you raise your funds for all these investments?
The fund is mainly coming from the revenue of the corporation itself. We have also loans from African Development Bank, and from the Swedish government. At this moment, as a policy matter, fund is not raised from the World Bank, believing that telecom is a profitable business and should be privatized.
You mentioned that your sector is profitable. Could you state the financial results of the Corporation?
Our corporation is very profitable, but to give you the whole package right now might not be appropriate. Anyway, for comparison purpose, if we see the 1998 performance the total revenue was increased by 8%, the expenditures were decreased by 1%, and the net profit was increased by 10.2%. The profitability of our business is measured by the revenue per subscribers that is about $220. This is the biggest rate in the telecommunication industry specially in our region.
You also mentioned previously privatization in you sector. Is there already a plan to privatize the Corporation?
This question might be a policy matter, which my corporation does not have any say. The general information we have is that the government has declared policy guidelines regarding telecommunication, that says there will be a private equity partner, and shareholder in the sector. This means we are looking for a strategic partner, but I do not know what will be the share. I can only assure you, that there will be a private involvement in our sector. | The Internet was launched over two years ago. How do you see the results so far, and what has to be done to make it more accessible?
The results are encouraging from the telecommunication point of view. However, from the customer point of view, we are receiving some complaints, that access is not always possible. This problem is due to the limited capacity of the existing modem. To overcome this shortage, we are trying to expand and double the modem in the coming two weeks. Considering the importance of Internet, we have also a plan to launch another project with the assistance of UNDP. The capacity of this new project will be for about 17 000 subscribers, and will be in business in 1999. Therefore, after ten months from now, I assure you, we will give service to our customers to their satisfaction level.
There are a lot of advertising concerning mobile telephones. Could you tell us, when will these be launched?
I am already using the mobile telephone. We are on the first stage, and preparing to commence at the end of this month. To give you a complete picture, we are starting with 36 000 subscribers found only in Addis Ababa, but the hardware and software capacity can be upgraded up to 100 000 subscribers. I am sure we will continue to expand our service to the main towns of this country, and be very successful in the mobile business. It will be a great gift to our customers for the year 1999.
Our readers are always interested in new business opportunities. In which areas of your activities are you interested to attract partners and foreign investors?
In the telecommunication sector, there are a lot of areas that can be of great interest to investors. To be specific, we always have network expansions. We are looking to have switches, transmission equipment, household plant equipment, wireless local, and lob technology. The population is reaching about 60 million, the country is very dense, and all the resources are still in the heart of the land. Therefore there are lot of opportunities in our sector. We can only provide service for 600 000- 700 000 people, whereas, the market can absorb about 5-6 million subscribers. One should also know, that telecommunication is a long term profit oriented and not a short term profit oriented. Conditions in Ethiopia are green to any investors and customers. We have a very competent and highly disciplined staff. We have a good culture, and we respect people. The only thing we need is their friendship, partnership, and concern. We are always happy to work with any partner who has interest to work in Ethiopia.
Could you mention some foreign investors, who have been interested in you sector?
So far, our sector is a 100% state owned company. However, partnership can be classified into different ways. We have not yet any equity share partnership, but in the service we have a lot of partnership. For instance, ATNT, MCI, and Sprent (US company) are our partnership in the service. We have a direct link, and we give service to each other. We are also working with the British telecom, Dutch telecom, French telecom, Japanese telecom, and many other big carriers all over the world.
What has to be done to make your sector more visible and attractive to foreign investors?
I think the sector is already visible and attractive to foreign investors. The guidelines are declared, and an international tender for a strategic partner might be open in the near future. I am sure most of the companies will participate in the tender, and that we will be able to get a good partnership.
We came also to interview you as a businessperson. Could you then tell us your own professional background?
I grow up in this corporation. I joined the company as an installer, but I had the opportunity to pass through different careers. To mention my recent positions, I had been deputy managing director in charge of finance and material resource, finance manager, and revenue chief, responsible for the international tariff and negotiations. Professionally I am an accountant, and I can say that I have passed through all the channels of the corporation.
What has been your most personal satisfying achievement, since you started working as acting director manager?
The annual net profit of the corporation was only about 48 million Birr, when I was promoted as a finance manager. I left the division with a net profit of 200 million Birr, that was a big achievement for me. Now, being the acting manager, during the previous periods the project cares were always small; today we have launched a big project, that can be seen as a very big achievement in Africa. All this, gives me satisfaction and a moral to work also on my day-off.
What will be your final message to our readers?
I can say that there is a big opportunity for them to come and work in Ethiopia. |
ETHIOPIAN TELECOMMUNICATIONS CORPORATION