Ethio Telecom lists 100 million shares at $2.54 each

Ethiopian state-owned Telecommunications Company, Ethio Telecom has announced a sales price of 300 birr ($2.54) for each of the 100 million shares it plans to list on Ethiopia’s new stock market. According to CEO, Frehiwot Tamiru, the shares will be sold via the company’s mobile payment platform.

Frehiwot also noted that a 10% stake in the company will be offered to Ethiopians. “This is a historic moment,” he said.

Ethio Telecom will eventually become the first company to list on Ethiopia’s new stock market. The creation of a bourse is part of Prime Minister, Abiy Ahmed’s plans to to open up the country to private investors. Floating 10% of Ethio Telecom also marks the first step towards the government divesting a further 45% stake in the telecoms provider to investors.

“This is something that we have to look into after the 10% sale because that will give us a sense of valuation,” Brook Taye, the CEO of its owner Ethiopia Investment Holdings, told Reuters, last week. Brook also said the government was open to relaunching the tendering process for a second private telecoms licence.

Ethio Telecom held a monopoly, serving a population of about 120 million before a consortium led by Kenya’s Safaricom won the country’s first private telecoms licence and started commercial operations in 2022. This move was considered a big part of the government’s efforts to open up the economy.

When Prime Minister Abiy Ahmed took office in 2018, he promised to liberalise Ethiopia’s economy, making the telecom industry, which serves a population of about 120 million, an attractive target for investors. However, recurring security issues, legislative changes, and concerns about the government’s commitment to opening the economy have since deterred potential investors.

The announcement of the potential partial privatisation of Ethio Telecom by Abiy in February signalled a significant shift in Ethiopia’s economic policy, aiming to attract foreign investment and enhance market competitiveness. The move was expected to bring in capital, expertise, and innovation, further driving the growth of the telecom sector.

Ethio Telecom’s 22% revenue increase in 2023

Recall that we reported that Ethio Telecom’s year revenue and net profit for the fiscal year ending in June showed significant growth.

The company’s revenue increased by 22% to 93.7 billion birr ($1.63 billion), and net profit rose by 21% to 21.79 billion birr, as reported by Chief Executive Frehiwot Tamiru during a news conference. It also reported a 9% increase in its total subscribers, reaching 78.3 million. Meanwhile, the number of subscribers to its financial service, Telebirr, surged to 47.55 million from 34.3 million in the previous year.

Telebirr, Ethio Telecom’s mobile money service also saw a remarkable growth trajectory with a total transaction value reaching 1.81 trillion birr. This indicates a substantial increase in the adoption and usage of digital financial services among Ethiopians.

The company’s revenue for the year increased by 16.7 billion birrs compared to the previous year. In 2023, Ethio Telecom announced that it earned 75.8 billion birr in the fiscal year 2023. The company’s net profit for the year was 18.78 billion birr.

Its foreign exchange earnings also increased by 20.7% to 198.2 million USD, achieving 117.5% of its target.

CEO, Frehiwot Tamiru highlighted the company’s achievements in subscriber growth, stating that Ethio Telecom reached 78.3 million subscribers, meeting 100.4% of its target for the year.

Then, Tamiru said that the company’s performance was “effective” and that 116 new services were launched during the year. She said that the company’s income in 2023 was 101% of the planned income and that it had increased by 23.5% compared to the 2022 budget.

She also attributed the company’s strong performance to the implementation of its “Lead” strategy, which was launched in 2022. 

“By offering 203 products and services, we have managed to earn 75.8 billion birr during the budget year, up from 61.3 billion birr which was earned in the previous budget year,” she concluded.