The Effect of Telecom Subscribers on Bank's Profitability
No Thumbnail Available
Date
2023-12-16
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
Telecommunications infrastructure is critical for banks' day-to-day operations. Due to easy access to telecommunication services, online banking transactions have shown a huge increase over the years. Going to bank branch offices is now only for critical issues, as most banking transactions can be held online using different banking applications. Different studies have assessed the effect these applications have on banks' performance like Mobile banking, Internet banking, Mobile money, ATMs, and others. However, limited studies are showing the effects of telecommunication subscribers on banks' performance. This study assessed whether telecommunication subscribers' increase or decrease affects banks' profitability. The study used the last ten years’ financial data of Ethiopia’s private commercial banks. Telecommunication data was collected from Ethio Telecom. The data collected was analyzed by use of descriptive statistics, and statistical software, Stata. The study found that there is no direct effect of telecommunication subscribers' increase on banks' profitability. The study recommended banks continue focusing on creating efficiencies using the telecommunication infrastructure as the increase in telecommunication subscribers by itself will not result in the bank’s profitability.
Key Words: Telecommunications, bank profitability, mobile and fixed telecom subscribers, Ethio Telecom