Ethio Lease this month became the first foreign-owned company to secure a financial services license in Ethiopia. Simplifying the country’s forbidding bureaucracy would help the country’s leasing market to reach its full potential.
INTERVIEW: Andualem Admassie Abate, CEO Ethio Telecom
TAR: How do you see the future of Ethio Telecom?
ANDUALEM ADMASSIE ABATE: Now we are preparing for what we call the second transformation. If you look at the world telecoms, operators are under pressure. So you need to bring in new ways of doing business: you cannot sit in a comfort zone. We are preparing ourselves to see where the telecoms industry is and where we are as Ethio Telecom. We would like to compare and come up with a new transformation. And this transformation may lead us in different directions.
So what is on the table?We have a plan to invest abroad. We are looking at the weaknesses and strengths of our neighbours. It’s about working together, as partners, because we don’t have any international experience. So we need to find companies who can work with us in co-branding and co-partnership.
Can you see yourself competing in Kenya, for example, a regional leader in telecoms?We’re not afraid of any African telecoms operators. We are the giant of Africa. If we come up with a different product and services then we’re in a good position. We’re not afraid of competition. But I don’t think we’ll start in Kenya. Maybe we’ll start with South Sudan or Somalia.
And what do you think is Ethio Telecom’s competitive advantage?One is the question of size. We are big enough; we have enough infrastructure within the country; we are establishing our own telecoms excellence academy and we’re producing a lot of engineers currently. Our engineers are now in the position to work in the West. In fact, one of the biggest problems that I have is that the crème are moving to Europe, to America, to the rest of Africa; […] And another thing is the financial strength of Ethio Telecom. Currently, our revenue is near to Birr40bn, which is almost $1.3bn per year. And our liquidity is also another area: whatever cracks and nagging are coming, we can weather [them].
Is Ethio Telecom planning to diversify into other products and services like, say, mobile money?I am fighting for mobile money here in Ethiopia to be telecom-led, not banking-led. If you look at Safaricom, 30% of its revenue is M-Pesa. I want that to be the case for Ethio Telecom.
To what extent is financing going to hinder your expansion plans?Finance is not an issue for us. We are minting money. Of course, we don’t have any liquidity problems. And we are the one financing most of the infrastructure, including the new railway […] The only thing sometimes is the foreign currency issue – balancing between the foreign and local currency. Even the loans we got from ZTE/Huawei/Ericsson: there is no sovereign guarantee. It’s not even a concessional loan.
Compared to some countries in the region, internet penetration in particular still lags. What’s your explanation for that?Of course, you’re right. One issue is the number of operators. If you have five operators people may have five SIM cards […] For us, very few people come up with a double SIM card effect. Of course I’m not saying we’re in a good position in terms of penetration – I’m not justifying in such a way. But these are contributing factors.
At the moment there is no mobile internet outside of Addis. How does that affect your business?That is a government decision; it is not our mandate. For sure it is a difficulty for us. But it’s a question of choice between the security and the revenue.
From the March 2018 print edition