Apr 02 2011

Bold enough to lower tariff? | Ethio Telecom new mobile, internet tariff

The state-owned Ethio telecom announced lower tariffs, applicable as of April 1. CEO of Ethio-Telecom Jean-Michel Latute announced the new tariff announced at a press-conference, held at the Sheraton Addis on Thursday, and on the home page of ethio-telecom, on Friday.

The new tariff evidently favors the youth, as a look at the details of the new tariff posted at Ethio Telecom websites indicates.

This comes at a time when many suspected the Ethiopian government would be wary of a Tunisia-style revolution and, thus, slide back on its promises to enhance telecom penetration, especially with regard to internet.

Mobile/GSM related tariff:

The tariff zones on Mobile calls are full scrapped, thus a flat rate 0.72 cents on peak hrs(0.3 off peak hrs), plus 15% VAT, will be charged for all calls from mobile to mobile, mobile to fixed telephone and fixed telephone to mobile. This is the tariff that used to apply to Mobile calls within the same zone.

It should be noted that so far a Mobile subscribers were assigned to some 8 zones and a Mobile call between different zones or to a fixed telephone was charged double – that is, 1.50 on peak hrs.(1.25 off pick hrs.).

The tariff change includes a Birr 15 reduction on mobile SIM card subscription fee – that is, from Bir 85 to Bir 60, though the SIM card replacement fee increased from Bir 15 to Bir 45, according to the tariff list on its website.

The tariff list on Ethio telecom website indicates 2 hours shrinkage of the ‘Off Peak hours’ time period for which lower tariff applies. Thus, the new ‘Off Peak hours’ period spans from 9 PM – 7 AM, in addition to Sundays and public holidays. Previously, the ‘Off Peak hours’ period was from 8 PM – 8 AM, plus Sundays and public holidays.

Indeed, the elimination of the special tariff that was applied to calls between two ‘Mobile zones’ and to Mobile – fixed phone calls may enhances across regional communications. Yet more, it is of particular use to the youth. The zonal tariff barrier was problematic among university students – where mobiles of different zones would be found in a single room or dormitory. The previous tariff was also prohibitive to fresh-employed youth, who moved to a different city but not ready to buy a second SIM card and subscribe to a fixed telephone service.

Internet services tariff:

The new tariff makes notable, albeit limited, changes in the internet service that enhances the affordability of the internet services called EV-DO data card and CDMA(2000) 1X data only, which are advertised as providing 400-700Kb/s and 50-70Kb/s internet connection, respectively.

With regard to EVDO data card, so far it was provided either as ‘unlimited data plan’ and ‘limited data plan’. The first option cost Birr 3,521, plus VAT, per month and unlimited connection, while the second provided a 2 GB internet access for Birr 400 monthly payment, after that with 0.40/MB, plus VAT charge. Evidently, it is the later that would be affordable for personal and household use.

The new tariff enhances the accessibility of the ‘limited data plan’ EVDO service as it provides three options: a 1 GB internet access for Birr 300 monthly payment, a 2 GB internet access for Birr 500 monthly payment, and a 4 GB internet access for Birr 700 monthly payment. Moreover, the subscription fee for the service is reduced from Birr 258 to Bir 230 and the charge for usage beyond the limit is lowered to 0.35/MB. (The price are inclusive of VAT )

The ‘CDMA(2000) 1X data only’, which is very popular among the youth, shows important changes in its tariff, according to the list on Ethio Telecom web site.

A user of this will be charges 0.10/minute in Peak hours and 0.07 Off Peak hours for the first 1300 minutes usage within a month, beyond that the tariff decrease to 0.07/minute in Peak hours and 0.04/minute Off Peak hours. Plus a 15% VAT charge. (Add 15% VAT on the prices)

It should be noted that the 1300 minute mark was quietly introduced some time in mid-2010. Before that, the service used to cost 0.10/minute in Peak hours and 0.07 Off Peak hours regardless of the amount of time used in a month. Then, ETC, Ethio Telecom’s predecessor, eliminated the ‘Off Peak hours’ tariff and started charging 0.10/minute for the first 1300 minutes usage within a month and 0.07/minutes that beyond time. Apart from the unethicalness, perhaps unlawful, of changing tariff without notifying the public, the move was detrimental on the youth, esp. university student and fresh graduates who used to benefit from the Off Peak hours rates. As they are unlikely to use beyond the 1300 minutes mark – that is about Birr 120, it was in effect a 30% tariff increase on that user group.

Thus, the new tariff not only corrects that but furthers the affordability of the service.

[It may be worth noting that a tariff list similar to the new tariff was posted on ETC website for a few weeks at the time when the 1300 minutes mark was introduced. However, the Off Peak hours tariff rates were removed later. Mind you, the tariff list was edited with no announcement even on ETC website]

Even though, the changes are a move in a positive direction, it doesn’t go far enough and is a belated one. It is to be recalled that in 2006 the then Minister of Transport and Communication, Junedin Sado, promised mobile call tariff would be lowered in a couple of years following the service expansion program. Moreover, the new internet tariff is still beyond the reach of most of the youth and its impact on internet cafes is uncertain.

Note that:

The tariff list, which is relevant to the discussion above is listed under the heading ‘residential tariff’ on Ethio Telecom website(link).

There are also additional services listed on Ethio Telecom website under the heading ‘enterprise tariff’ (link).

To be on the safe side, I saved the ‘residential tariff’ list in PDF format(HERE), as it appear on April 1/2011, since it is the basis of my article.