ASSESSING THE IMPLICATION OF INTERMEDIARIES OF ETHO TELECOM PRODUCTS IN ADDIS ABABA ZONES.

Abstract

Despite its impressive revenue contribution, the intermediaries channel of Ethio Telecom in Addis Ababa is full of administrative problems. the intermediaries distribution channel distribute mainly two products such as physical voucher card and SIM. In this intermediaries channel distribution the company on the one hand employs local distributors which are required to sell within their respective zone/region territory only and on the other hand national distributors which are free to circulate the products anywhere in Addis Ababa Zones as well as the nation-wide. The objective of this research is therefore to evaluate the best way of the current intermediaries channel of ethio telecom and recommend an optimal channel structure alternative. Accordingly, This study was conduct use descriptive research design by the techniques mainly 5 point likert scale questionnaires were distributed to three channel stakeholders namely Ethio Telecom staffs, distributors and retailers in Addis Ababa. 53 respondents of Ethio telecom employees are selected purposively to determine the sample size.In a nutshell, performance of the intermediaries distribution channel based on the primary data is poor qualitatively. The major poor performance areas are root terms of the distribution agreement (such as door to door distribution, territory confined distribution of the products) are not implemented, and Channel stakeholders indicated that it is impossible and not feasible to control territory confined distribution of Ethio telecom’s products . It is impossible to avoid territory breach. Some retailers purchase Ethio telecom’s products not from distributors in their territory which is a best prove of uncontrollability of the policy of territory limited distribution. Consequently, the researcher proposed/recommended alternative and optimal distribution channel design. The recommendation is that ethio telecom needs to waive the concept of territory limited distribution and employ few mega national distributors at upstream channel level parallel to the undifferentiated nature of Addis Ababa Zones market. The national distributors would organize themselves in all regional/zonal branch offices parallel to organizational structure of ethio telecom in Addis Ababa. Candidate distributors for this proposal are Ethiopian Posta Service Enterprise and Hidassie Telecom Share Company. These two candidate and strategic business partners of ethio telecom have more than ninety eight sales outlets together throughout Addis Ababa.