Ethio telecom’s new steps to modernization

07 Sep 2017


The introduction of telecommunication in Ethiopia dates back to 1890 when the first telephones were brought by Ras Makonnen from Italy during the reign of Emperor Menelik II. The phones connected between the Palace and the Imperial treasury; the sound of disembodied voices frightened the local priests, who thought it was the work of demons. The Emperor responded to their protests with disdain, and later used the telephone to give orders to his provincial governors.

Sources indicated that Emperor Haileselassie had begun the process of introducing radio transmitters to the country for civilian and military use in the years before the Italian invasion; however, the telecommunication network was destroyed during the war against Italy.

According to a research paper entitled 'Background Paper on Telecom and Telecom Statistics', Ethiopia re-organized the telephone, telegraph and postal services in 1941. The Imperial Board of Telecommunications (IBTE) was established in 1952. The Board had full financial and administrative autonomy and was in charge of the provision and expansion of telecommunications services in Ethiopia.

The Imperial Board of Telecommunications was replaced by Ethiopian Telecommunications Authority in 1981. The Authority was in charge of both the operation and regulation of telecommunication services in the wake of the market reforms.

In 1996, the Government established a separate regulatory body, the Ethiopian Telecommunication Agency (ETA) and during the same year, the Council of Ministers set up the Ethiopian Telecommunications Corporation (ETC).

Under the supervision of the ETA, the principal duty of ETC is maintaining and expanding telecommunication services in the country and providing domestic and international telephone, telex, and other communication services, the Background Paper noted.

An important milestone in the history of ETC was the introduction of internet service in 1997 through Ethio Internet and mobile phone service in 1999 through Ethio Mobile. When cell phones were first introduced in Ethiopia, all subscribers had to visit the ETC main office to register, where they received their sim card and mobile apparatus.

During that time, all subscribers had identical handsets which was sold by the ETC; Erickson handset. Because of this, there was no other alternate cellphone shops which sell handsets as ETC’s mobile phone service could only be obtained through the handsets the Corporation provided.

As soon as ETC allowed customers to buy their own handsets, a number of cell phone service centers boomed and continue to mushroom in many urban parts of Ethiopia.

From 1999 – 2003, all subscribers only received postpaid mobile services, meaning that at the end of each month, they received a monthly bill. This service was only limited to the people who could prove they can afford to pay a phone bill; not everyone was approved to register and obtain the postpaid service.

The option of prepaid mobile services was introduced in 2003, allowing customers to register and buy prepaid cards and use it according to his/her capacity and need. This opened door to all kinds of customers. This prepaid service is commonly used in all parts of Africa as it allows customers to control their spending.

For many years, customers could only obtain their cell phone services by visiting an ETC branch to get connected (the sim card and the handset) but that is not the case anymore.

Nowadays, customers could choose between postpaid and prepaid mobile services; with postpaid, there are some regulations that need to be followed. The customer needs to prove their ability to support their monthly bill.

Quite commonly, a service request letter from an employer (organizations/offices) and a guarantee letter of subscription are needed for the postpaid service to be provided. Usually, these kinds of subscribers are from government organizations, embassies and international organizations as well as personal guarantors who prove that they can cover their monthly bills. It is said, however, that most people use the prepaid service.

For many years, both fixed line telephones and cellphones were largely confined in public institutions and wealthier individuals and households. Those who possess phones had been regarded as affluent in the society.

Today, the situation has been significantly changed and millions of Ethiopians living both in urban and rural areas have better access to telecom services. The number of mobile subscribers in the country has also skyrocketed during the past decade.

Tribute to the government’s heavy investment in telecom infrastructure and ethio telecom’s effective and efficient service delivery, a significant portion of the Ethiopian population have been enabled to improve their livelihood and communicate with the world in their fingertips.

Currently the ethio-telecom is the sole provider of all telecommunication services in Ethiopia and offer data, voice and Short Message Service (SMS) for individual users, public and private organizations. During the past decade, the telecom operator has made aggressive engagement to modernize service delivery and commenced various services to enhance customers’ satisfaction thereby increase its revenue.

During the 2016/17 fiscal year, ethio-telecom introduced 10 new services including Virtual Internet Service Provider / VISP/, Mobile Virtual Private Network, Fixed Line-Next Generation Network and Ethio Service Delivery Platform among others.

Virtual Internet Service Provider (VISP) Service is one of the ethio-telecom new services that enables companies sell internet services to end users without fully deploying telecom infrastructures. Under this service, companies will purchase VISP service at wholesale level from ethio telecom and retail to end users using the operator’s infrastructure.

Companies should have a value add service (VAS) license and a wholesale agreement with ethio telecom to be subscribed for the service. Ethio-telecom is eyeing to secure 5.8 million Birr from VISP with the customer base of five thousand.

The rationale to introduce this service is increasing the participation level of VISPs in the service delivery and maintenance service and motivating value added service providers to participate in the internet market and content provisioning.

Colocation service for local hosting provider is among ethio telecom new services. Colocation would enable hosting service providers to place their services in a well-equipped and secured data center and engage in providing hosting and related service to end users.

The offer aimed at encouraging local content hosting and local development which have great impact on improving the internet ecosystem and the target party is enterprises, specially hosting service providers. Only enterprises engaged in reselling of hosting services for local content providers could be subscribed to this service.

Estimated revenue from Colocation service includes international bandwidth cost saving which is in average estimated monthly revenue to ethio telecom is around 500,000. The benefits of this service includes that operator would save the international bandwidth cost, since the volume of the traffic will not touch the international bandwidth and improve customer experience since end customers will obtain more relevant content with fast speed.

Virtual Private Network (VPN) Service was also introduced to enterprise customers to connect branch offices; head office and data center in a secured manner and allow them to access company information from different locations. Its target segment is enterprise customers especially financial institutions. The service would have an estimated 4.7 million Birr revenue while serving four thousand customers.

Night Mobile Internet Package is available to mitigate data traffic jam during pick hours by utilizing late night hours, the idle and perishable resource. By introducing the service, ethio-telecom aimed at making internet service more affordable for price sensitive segments including students.

The service is compatible with both prepaid and postpaid customer service and all network types such as 2G, 3G and 4G. Customers could purchase the offer from ethio-gebeta platform. The telecom service provider set a plan to secure 20 million Birr from Night Mobile Internet Package with a customer base of 6.7 million Birr.

Prepaid fixed line also known as Fixed Line-Next Generation Network (FL-NGN) service was issued as an alternative payment plan to fixed line customers. The service is for both enterprise and individual customers. The provision of this service would increase fixed line customer base, revenue and bring customers satisfaction as well as reducing bad debt.

Keep my Number service is available to enable mobile and fixed line customers keep their service number for a specified period of time when they will not use the number for the stated time due to different reasons. Both enterprises and individual customers can use the service. Ethio-telecom introduced this service to reduce number termination rate and keep customers interest.

Fixed Line Packages (fixed to fixed and fixed to mobile), which consist a fixed line voice discounted packages from fixed to fixed and fixed to mobile lines was among the service ethio telecom lunched in the current year. The service is also available for residential customers to maximize their satisfaction and enhance its revenue.

Ethio Service Delivery Platform that is designed to produce an integration layer for network equipment of ethio telecom and third party partners was launched to enable the third parity content and service providers a single integration for service delivery.

Content and service providers may provide the content types such as Music/ Video/ Audio Clip, Games/ Applications, SMS/ Unstructured Supplementary Service Data (USSD) services and Wallpapers /Pictures / Mobile Themes to end users.

The service delivery would have unified access through unified Application Programmable Interface (API) and standard service creation environment, thereby easing the ethio telecom and third parties’ activities.

Unified settlement, which is part of the SDP, will generate service report and help to increase the successful chagrining rate and ensure the interests of ethio-telecom and content/ service providers alike. One of the new packages, Ethio Digital Self-care is a mobile application that aggregates the USSD and SMS based services into one portal to enable customers access ethio services easily. The application simplifies service delivery and maximizes revenue by improving user’s experience.

The digital self-care also enables users to perform airtime charging, balance transfer/query, airtime recharge for third party and consists of all ethio-gebeta package services such as internet, SMS and voice.

The government of Ethiopia allocated considerable investment in telecom services and in the past decade alone, over 3 billion USD has been invested in telecom infrastructure and service expansion projects. Besides, significant results have been witnessed in improving the accessibility and capabilities of mobile networks and enhancing country’s mobile penetration rate.

According the report Australia based telecommunications research and consultancy company, Budde Cum issued in 2016, Ethiopia’s broadband market is set for a boom following massive improvements in international bandwidth, national fiber backbone infrastructure and 3G mobile broadband services. The report further indicated that country’s telecom retail prices are now comparable to other markets in the region that already have developed markets.

It was known that ethio telecom launched the Fourth Generation (4G) service in Addis Ababa on March 21, 2015 with the help of the Chinese Company, HUAWEI.

Starting from a low base, mobile penetration is rising and the sector continues to be a robust telecom option in both urban and rural parts of the country, the report further stated.

Budde Cum indicated that Ethiopia’s telecom service penetration rate has been growing from time to time and in the 2016, while the number of mobile phones in the country equates 48.3 percent of the total population, 4.2 and 1 percent of Ethiopians have access to internet and fixed line telephones respectively.

Ethiopia sets target to have 103 million mobile and 56 million internet subscribers by the end of the Second Growth and Transformation Plan (GTPII) period (2019/20). And to this end, ethio-telecom should further extend telecom infrastructure development activities that would have a crucial role in realizing sector's goals.

In general, during the past two decades and now the country has witnessed remarkable achievements in the telecom sector. However, ethio-telecom should give more emphasis to service expansion and network quality improvement works to satisfy its customers' demand.


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