Industrial policies and regulatory framework of the telecom industry in Ethiopia

Abstract

Ethiopia received the telephone technology seventeen years after its invention in the world. Owing to a number of constraints, however, the telecom sector’s performance has not been remarkable even by the standards of Africa. The telecom sector in Ethiopia has been characterized by a vertically integrated market run by a state-owned enterprise outside the realm of competition and the Ethiopian Telecommunications Corporation has a monopoly over all telecom services. This monopolistic structure has resulted in limited access to and poor quality of services in all telecommunications services. Institutionally, the three basic functions (industrial policies, regulation, and operation) have not been separated. Solving these and other related problems would require that the Ethiopian government introduce competition into the sector, remove all institutional hurdles that prevented the sector from growing, build the legitimacy of the regulator, enhance human resources capacity, make it more responsive to the ever growing consumer needs. The purpose of this study was to assess the industrial policies the government seeks to achieve by running a public telecom monopoly and critically assesses whether introducing some form of competition would improve the efficiency and accessibility of telecom services.