The Ethiopian telecom industry: gaps and recommendations towards meaningful connectivity and a thriving digital ecosystem

Berhan Oumer Adame

doi:10.1016/j.heliyon.2021.e08146

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. 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 no wonder that Ethiopia is depicted as one of the weakest economies in the world. This paper identifies the causes for extraordinarily poor telecommunications service in Ethiopia and offers recommendations for near-term improvement. The approach considered includes existing work surveys and document examination, and to this end, the work has relied primarily on secondary data sources. Inexperienced and ineffectual regulatory oversight, absence of facilities-based competition, inadequate interconnection with the neighboring nation's networks, and inability to localize outbound traffics are identified as factors affecting the Ethiopian telecom industry performance. Full liberalization with an effective regulatory body and hosting a sizeable Internet Exchange Points (IXPs) are recommended for better connectivity and a thriving digital ecosystem in Ethiopia.

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

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