By Hallelujah Lule | The Addis Connexion

ADDIS ABABA, ETHIOPIA — Forty years ago, the Ethiopian Telecommunications Board (precursor to today’s ETC) was viewed as a progressive government utility agency providing critical services. It even had a robust marketing department putting out ads such as the one below that were humorous and not at all like the image that today’s ETC usually fosters. In fact, today ETC has probably only been recently surpassed by EEPCO as the state utility company that Ethiopians most love to hate. Isn’t it time to open up the field to new players?

If the economy is a motor propelling the country forward, communications is a lubricant to make the journey efficient. When it comes to Ethiopia, the lack of ICT development causes severe friction inside the engine.

Ever since the EPRDF led government took over, the country has experienced a surge of public investment in various infrastructure projects such as energy, transportation, telecommunications etc. Though the overall case for liberalized markets are clear, experiences such as China’s have shown us that wise public infrastructure investment in different infrastructural developments often result in trickle down to the poor.

But perhaps the most shortcomings are present in the telecom sector. Lacking a policy framework to promote both physical and human capacity, the state telecom monopoly has left the country years behind most of the world in both telephony and internet penetration.

As technology is dominant in the sector, private initiative is crucial in identifying the less costly and more efficient products to supply through competition. This calls for an integration of the private sector in the telecommunications development policy and framework. It should also focus on delivering efficient services through removing bureaucracy from the system and provision of services to the grassroots level. It is crystal clear that the quality and accessibility of information technology has a huge impact on the whole economy starting from pulling investment to facilitating growth inside, creating jobs, raising public income and more.

The government has recently reaffirmed its intention to keep the status quo in telecoms for a long time to come. In instances where the state practices a monopoly over a certain sector, procuring the necessary financing tends to be difficult, often requiring questionable loan provisions such as exclusive supplier agreements, and can come at the expense of other sectors.

The rationale given by the Ethiopian government to keep ETC isn’t holding water. Mismanagement, corruption, inefficiency and ineffectiveness cannot be excused for plans of rural expansion and stability that have not come. Privatization with regulation and taxation appear a much better route to achieving targets and garnering revenue.

The Internet, introduced in Ethiopia in 1997, is a case in point. The number of subscribers still stands as one of the lowest in simple and per-capita magnitude anywhere in the world while, according to research by Samuel Kidane (PhD), the potential Internet user base (basic e-mail and some web-browsing) is as high as high as 250,000 in the city of Addis Ababa alone.

This is a potentially big market capable of sustaining a continued growth and also capable of generating significant revenue that could guarantee a strong foothold for Internet in Ethiopia.

However, the state of Internet penetration in the country hasn’t shown much improvement for the past 5 years. Even the long awaited upgrading of the national Internet infrastructure, when completed, will increase the subscriber base to only 12,500, a fraction of the potential market size.

Telecom monopolies used to be commonplace on the continent. But now almost all African countries seem to have learnt their lesson and allow competition in the communications space. Ghana for example has licensed as many as 40 ISPs, Malawi 24, with Egypt boasting 40 and Kenya, a long believer in telecom monopoly finally agreeing to license a staggering additional 50 players in the ISP industry.

But the real kicker when evaluating Ethiopia’s experience is that the last African country to get connected to the net and world’s worst failed state, Somalia, boasts multiple service provider and better infrastructure than much of the continent. Samuel asks, if ISP industry could thrive in an environment as difficult and challenging as in Somalia – in the absence of a government – then why is it that Ethiopia, a country with one of the oldest telecom monopolies and most experienced telecom technical and management labor force, is wasting such an opportunity and valuable time in its endeavor to develop?

Some may say that its about the over 3 billion ETB in revenue that the government is loath to relinquish such direct control over. Others may believe it’s mostly about ideology. In any case, it does not appear likely that the embrace of open communications technology which in part propelled Obama’s recent victory, is likely to be seen here for quite some time.