Ethiopian Telecom Industry: Gaps and Recommendations Towards a Meaningful Connectivity and a Thriving Digital Eco-System

Berhan Oumer Adame

doi:10.2139/ssrn.3885501

Abstract

Ethiopia, the second-most populous country in Africa with 110 million inhabitants, has one of the oldest public telecommunication operators established in 1894. Despite its age, Ethiopian telecommunication remains one of the least developed in the world. According to ITU, in 2019, mobile-cellular subscription (per 100 people) was 39%, and 20% internet penetration. And as of June 2018, the international transmission speed per internet user was two kbits/s. Different studies widely acknowledge that no modern economy can be developed short of telecommunication services. It is, therefore, no wonder that nowadays Ethiopia is depicted as one of the weakest economies of the world. This paper will identify causes for the extraordinarily poor telecommunications service in Ethiopia and offer recommendations for near-term improvement.The approach considered in this study includes existing works survey and document examination; and to this end, this work relied primarily on secondary sources of data. After analyzing data collected from various sources, the paper identifies several reasons for Ethiopia’s low subscribership and network performance. Such factors include inexperienced and ineffectual regulatory oversight, the absence of facilities-based competition, inadequate interconnection with the networks located in adjacent nations, and the inability to localize outbound traffic. Upon identifying the above listed factors, the paper suggested the following recommendations for Ethiopian telecom industry stakeholders. First and foremost, the Ethiopian telecom market needs full liberalization with an independent and efficient regulatory body establishment. Since massive investment is required to improve last-mile, middle-mile and first-mile connectivity, mobilizing investment from various stakeholders is crucial. In addition to this, Ethiopia must host sizeable Internet Exchange Points (IXPs) to improve interconnection among countries within the continent.

Highlights

Founded over a century ago, Ethiopian Telecommunications service provider is Africa's oldest public telecommunication operator
Unless cheap international connectivity is achieved, no matter what new investment in other parts of the telecom value chain is done, a significant price reduction is very unlikely to occur for end-users (Jensen, 2009)
This paper identifies the causes for extraordinarily poor telecommunications service in Ethiopia and offers recommendations for near-term improvement

Summary

Introduction

Founded over a century ago, Ethiopian Telecommunications service provider is Africa's oldest public telecommunication operator. Until 1952, the operator was under the Telephone, Telegraph, and Postal services department. With proclamation No 131/52 the Imperial Board of Telecommunications (IBTE) was established, in 1952, to expand and provide telecommunications services. Later in 1981, IBTE restructured itself as both a telecom regulator and operator. Regulation 10/1996 organized the Ethiopian Telecommunications Corporation (ETC) to operate telecommunication services (Federal Democratic Republic of Ethiopia, 1996a), and in the same year, proclamation 49/1996 established a separate regulatory body, the Ethiopian Telecommunication Agency (ETA) (Federal Democratic Republic of Ethiopia, 1996b). The Ethiopian government rebranded ETC, the operator, as Ethio Telecom by November 2010

Methods

Findings

Discussion

Conclusion