Internet From The Horn Of Africa: Ethiopia Case Study - ITU

INTERNET FROM THE HORN OF AFRICA:ETHIOPIA CASE STUDY

July 2002

INTERNATIONAL TELECOMMUNICATION UNIONGENEVA, SWITZERLAND

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Foreword

This case study has been carried out in the framework of a series of Internet diffusioncase studies currently being carried out by the ITU Strategy and Policy Unit (SPU), incollaboration with the Telecommunication Development Bureau (BDT). This case studywas carried out with the assistance of the Commonwealth Telecommunication Organi-zation (CTO) and the Department for International Development (DFID), United King-dom. Mike Jensen and Claudia Sarrocco wrote the report and carried out the fieldresearch in Addis Abeba from 10 to 15 March 2002. We would like to thank Ato FantaAdane of the Ethiopian Telecommunications Corporation (ETC) and Ato Abebe Checkolof the British Council in Addis Abeba, whose valuable information and comments greatlyassisted us in the field research and in the writing of the report. Our thanks go also toJoanna Goodrick, Nathalie Delmas, Tim Kelly, Mike Minges and Vanessa Gray, for theirinputs to the study.

We also thank the State Minister of Telecommunications, the director of the EthiopianTelecommunication Agency, the General Manager of the Ethiopian TelecommunicationCorporation, as well as to those we interviewed for dedicating time to answering ourquestions.

The views expressed in this report are those of the authors and may not necessarilyreflect the opinions of the International Telecommunication Union or its members, ofthe Commonwealth Telecommunication Organization or of the Government of the FederalRepublic of Ethiopia. More details can be found on the ITU website at:http://web.itu.int/osg/spu/casestudies.

© ITU 2002

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Contents

1. Country background ............................................................. 1

1.1 Overview ............................................................................ 1

1.2 Demography........................................................................ 2

1.3 Economy ............................................................................. 31.4 Human development ............................................................ 4

1.5 Political ............................................................................... 4

2. Communication technology status ........................................ 62.1 History and status of telecommunications in Ethiopia................ 6

2.2 Network and capacity ........................................................... 6

2.3 Regulation and policy-making .............................................. 12

2.4 Privatization ...................................................................... 132.5 Licensing........................................................................... 13

2.6 Sector liberalization ............................................................ 14

2.7 International traffic and revenues ........................................ 16

3. Internet strategy and policy ............................................... 18

3.1 Status of the Internet ......................................................... 18

3.2 Pricing structure for Internet services ................................... 20

3.3 Regulatory status of Internet ............................................... 233.4 Universal access ................................................................ 24

4. Information and communication technologies and the nation26

4.1 Education .......................................................................... 264.2 Health .............................................................................. 28

4.3 E-commerce and trade ....................................................... 28

4.4 Government ...................................................................... 29

4.5 NGOs and international organizations ................................... 29

5. Conclusions and recommendations ..................................... 31

5.1 State of the Internet in Ethiopia ........................................... 31

5.2 Sector liberalization strategy for Government ........................ 325.3 National strategies and policies to increase Internet diffusion .. 34

5.4 Ensuring low Internet access tariffs ...................................... 35

5.5 Universalizing access .......................................................... 36

5.6 Sectoral support strategies .................................................. 365.7 General operational strategies for ETC and ETA ...................... 39

5.8 Other observations ............................................................. 39

Annex 1: Framework dimensions ............................................. 40Annex 2: Meeting Schedule ...................................................... 43

Figures

1.1 Map of Cambodia ................................................................. 1

2.1 The world's most wireless place ............................................. 5

2.2 Cambodia telecom market ..................................................... 84.1 Young but not well-educated ............................................... 25

5.1 State of Internet in Cambodia .............................................. 33

Tables

1.1 Population indicators ............................................................ 2

1.2 Human Development Indicators ............................................. 3

2.1 Cambodian telecom service operators ..................................... 72.2 Prefix soup .......................................................................... 9

2.3 Cambodia's international call tariffs ........................................ 9

2.4 Fixed telephone tariffs ........................................................ 11

2.5 Mobile pricing .................................................................... 113.1 Cambodia's Internet players ................................................ 15

3.2 Dial-up Internet pricing ....................................................... 17

3.3 Cambodia's Internet connections ......................................... 19

4.1 Cambodian government online ............................................ 23

4.2 Cambodia at school ............................................................ 26

Boxes

3.1 The international development community,Cambodia and the Internet ................................................. 14

3.2 The tribulations of the Khmer font ........................................ 20

4.1 The Prime Minister on ICT ................................................... 24

4.2 E-villages and E-charity: A conundrum ................................. 274.3 KIDS in the e-café .............................................................. 30

4.4 E-archiving: “Those who cannot learn from historyare doomed to repeat it” ..................................................... 30

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Acronyms

AVU African Virtual University

BITE Bringing Internet To Ethiopia

COMESA Common Market for Eastern and Southern Africa

ESTC Ethiopian Science and Technology Commission

ETA Ethiopian Telecommunication Agency

ETC Ethiopian Telecommunication Corporation

ETTI Ethiopian Telecommunications and Training Institute

ICT Information and Communication Technologies

ISPs Internet Service Providers

OAU Organization for African Unity

PadisNET Pan African Documentation and Information Service Network

UNECA UN Economic Commission for Africa

VoIP Voice over Internet Protocol

VSAT very Small Aperture Satellite

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1. Country background


Figure 1: Ethiopia

Source: CIA World Factbook 2001, http://www.cia.gov/cia/publications/factbook/.

1.1 Overview

The Federal Republic of Ethiopia,known in the past under the biblicalname of Abyssinia, is one of the mostancient independent countries in theworld. It has its historical origins inthe Empire of Ethiopia, whichaccording to legend was founded byMenelik I, son of King Solomon andQueen Sheba. Ethiopia is the onlycountry in Africa which has never beencolonized. For this reason it stands asa symbol for other African countriesand has been chosen to hostimportant regional African institutions,such as the Organization for AfricanUnity (OAU) and UN EconomicCommission for Africa (ECA).

Located on the Horn of Africa, in theeastern part of the continent, Ethiopiais bordered by Eritrea to thenortheast, by Djibouti and Somalia to

the east, by Kenya on the south andby Sudan to the west (see Figure 1).Its territory, of about 1.3 millionsquare kilometers, consists of amassive highland complex ofmountains and plateaus, divided bythe Great Rift Valley running fromsoutheast to northeast, andsurrounded by lowlands, steppes orsemi-desert.

Although a landlocked country today,Ethiopia used to have access to thesea through Eritrea, formerly one ofits provinces. After the referendum of1993, however, Eritrea becameindependent, leaving Ethiopia withouta coastline. Due to recent conflictswith Eritrea, almost all of Ethiopia’ssurface import/export traffic passes byroad or rail through Djibouti.

Ethiopia has extremely varied climaticconditions due to its location close to

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Ethiopia Internet Case Study

the equator and to the fact that mostof the country l ies at some1,500 metres above sea level. Theterritory can be divided into threemain climatic zones: the cool zone,where the temperature ranges fromzero to 16 degrees Celsius, thetemperate zone, where most of thepopulation lives, which is typicallysituated at between 1,500 and2,600 metres with averagetemperatures of around 20 to25 degrees, and the hot zone, mostlylocated in north east and southeastern lowlands, where the climateis tropical and arid. The rainy seasonis from April to September. However,there are many semi-desert areas andthe country has a history of severedrought. The last drought took placein 2000, and was considered one ofthe worst droughts of the last15 years. It affected more than eightmillion people in Ethiopia, causingsevere famine and starvation in thecountry as a whole, with the worst ofthe devastation affecting thelowlands.1

Transport is another major problemin Ethiopia. The country has the lowestroad density per capita in the world.The poor development of this sectorhas hampered economic developmentand remains an obstacle to economic

integration, and at the same timecreates additional need for improvedelectronic communications. Only21 per cent of the road network ispaved, with few interconnecting linksbetween adjacent regions and anundeveloped feeder road network. Asa result, large parts of Ethiopia areisolated and dependent on packanimals for transport. A basic railservice links Addis Abeba with Djiboutivia the eastern Ethiopian city of DireDawa. Passenger and cargo airtransport services are provided byEthiopian Airlines. Its internationalflights link the country with 43 citieson three continents, and its domesticservice l inks 38 airfields and21 landing strips with Addis Abeba.

1.2 Demography

The first census in the country wascarried out in 1984, when thepopulation amounted to some42 million inhabitants, includingEritreans. In 1994, the date of thesecond census, there were about49.22 million inhabitants (excludingEritrea). The growth rate of the lastten years has been on average 2.7 percent a year, and in 2001 the populationwas estimated at about 65.4 millioninhabitants,2 making the country thethird most populous in Africa.

Table 1: Population indicators

Source: World Development Indicators, World Bank.

1997 1998 1999

Total population 59’750’000 61’266’000 67’782’000

Population, female (% of total) 50 50 50

Rural population 84% 83% 83%

Population growth 2.57% 2.51% 2.44%

Illiteracy rate, adult total 65% 64% 63%

Population density 60 61 63

Age distribution

Population ages 0-14, total 27’587’526 28’410’646 29’184’940

Population ages 15-64, total 30’516’592 31’217’890 31’855’770

Population ages 65 and above, total 1’637’536 1’630’742 1’617’957

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There are six major ethnic groups inEthiopia, each with its own language.The official language of Ethiopia isAmharic. However up to 286 differentdialects are spoken in the country andthere are 25 official languages ofinstruction.

The largest city is the capital, AddisAbeba, with a population of2.5 million, followed by Dire Dawa,with 0.23 million. The majority of thepopulation, around 83 per cent, livesin rural areas. There are about12 million households in the country,with the average household consistingof 5 people.

Ethiopia has a young population, withonly 2.9 per cent of the total over65 years of age and about 45 per centunder 15. This is partly due to a femalefertility rate of 6.8 per cent and anestimated life expectancy of just 43-45 years (see Table 1).

1.3 Economy

On 28 May, 1991, the TransitionalGovernment of Ethiopia took over an

essentially State-owned and operatedeconomy, and began to rebuild theinstitutions and infrastructure neededto lead the country’s development.Since then, the country hasundertaken a programme of economicreform, aiming to stabilize andliberalize markets, and the EthiopianInvestment Authority and theEthiopian Privatization Agency havebeen established. In the same year,the Government started selling State-owned enterprises, including thepower supply company. Ethiopiaissued new laws opening banking andinsurance to the domestic privatesector and most State-owned retailshops, hotels, and restaurants arenow private. To date, about180 government entities have beenprivatized.

Ethiopia’s gross domestic product(GDP) in 1999 stood at aroundUSD 6.5 billion, corresponding toabout USD 620 per capita (inpurchasing power parities), ranking itas one of the poorest countries in theworld. The Ethiopian economy isheavily dependent on agriculture,

Table 2: GDP per capita in PPP$ (selected African countries)

Source: World Development Indicators, World Bank.

Countries 1995 1996 1997 1998 1999

Botswana 5’843 6’189 6’554 6’569 6’872

Ghana 1’710 1’767 1’792 1’808 1’881

The Gambia 1’451 1’462 1’492 1’497 1’580

Central African Republic 1’128 1’076 1’106 1’125 1’166

Kenya 1’027 1’046 1’037 1’010 1’022

Uganda 999 1’069 1’081 1’094 1’167

Burkina Faso 836 875 896 916 965

Madagascar 801 793 786 776 799

Eritrea 787 825 822 880 881

Zambia 754 788 784 753 756

Rwanda 736 833 799 837 885

Mali 678 692 723 719 753

Mozambique 658 682 733 796 861

Ethiopia 563 610 630 595 628

Malawi 546 568 574 570 586

Tanzania 472 484 484 482 501

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which accounts for approximately50 per cent of the national GDP, 90per cent of exports and employs80 per cent of the workforce. Industryand manufacturing still have a minorrole in the formal economy, accountingrespectively for 11 and 7 per cent ofGDP (1999 data).3

Most of the revenues from agricultureare derived from coffee, which isestimated to constitute 60 per cent ofnational exports and contributes10 per cent of national GDP, providinga livelihood for more than 15 millionpeople, i.e. about 25 per cent of thetotal population.

From 1993-1998, the countryachieved an annual average economicgrowth rate of 6-7 per cent and anannual average inflation rate below4 per cent. Despite the wide reformprogramme, the Ethiopian economyweakened in the late nineties,following a three-year drought and theconflict with Eritrea in 1999, duringwhich increased military expenditurefurther harmed the economy,classified by the World Bank as‘severely indebted’. Ethiopia also hasa large current account deficitresulting from a highly negativebalance of trade and a high ratio ofdebt outstanding to exports and GDP.In April 2001, Ethiopia, classified bythe UN as a least developed country(LDC), was permitted to rescheduletwo-thirds of its international debtuntil 2004.

In 1999 imports accounted forUSD 1.3 mill ion, and mainlycomprised machinery, manufacturedgoods and chemicals, while exports,which in 1998 totaled less than halfof imports, consisted of coffee, as wellas oil seeds, hides, skins, sesameseeds, pulses, chat/qat, live animals,honey and beeswax, fruits andvegetables.

To achieve long-term economic andsocial development goals, and to feeda rapidly growing population, theGovernment of Ethiopia focuses onagricultural development as thecatalyst for economic growth and isincreasing reliance on free marketforces and the private sector toexpand exports and supplant imports.Ethiopia is a member of CommonMarket for Eastern and SouthernAfrica (COMESA).4

1.4 Human development

Ethiopia ranked 158 out of162 countries in the UNDP’s 2001Human Development Index.Indicators of human development forthe country are shown in the UNDPreport on the country at http://www.undp.org/hdr2001/indicator/.

Ethiopia ranks very low in almost allthe indicators, particularly in respectto life expectancy and literacy rate, inwhich the country is among the lastentries. This is also reflected in a highhuman poverty index (HPI, seeTable 3).This index measuresdeprivation in three main areas:

longevity (percentage of peopleexpected to die before age 40),knowledge (percentage of adultswho are illiterate), and standard ofliving (percentage of populationswithout access to health servicesand to safe water, and of childrenunder five who are under weight).

1.5 Political

Ethiopia has been through almostevery form of government duringthe last century: the empire of HaileSelassie in the 1920s, the short-lived occupation by Italian armedforces in 1936, Lieutenant ColonelMengistu’s Marxist dictatorship

Table 3: Human Poverty Index

Source: UNDP Human Poverty Index,online at http://www.undp.org/povertyreport/.

Sudan 37

Tanzania 30

Uganda 41

Mozambique 50

Ethiopia 56

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from 1974 until 1991, and finally thecurrent Federal Democratic Republic.

The first democratic elections, bothfederal and regional, were held in1995 and the Federal DemocraticRepublic of Ethiopia (FDRE) was finallydeclared on 22 August 1995, after afour-year transitional government: forthe first time in the country’s long andrich history, the Ethiopian peopleswere living under a government oftheir own choosing, and had a strongvoice in government at the local,regional, and federal levels.

A Constitution was created, based onthe Universal Declaration of HumanRights, political power wasdecentralized and the country wasdivided to nine regionaladministrations (Tigre, Afatm,Amaram, Oromia, Somali,Benshangui, Gambela, Harer andSouthern), which enjoy considerableautonomy and have the right to

secede. The federal Government isresponsible for foreign affairs, defenceand economic policy, while the otherfunctions are delegated to the regions.Regions are further divided into zones,warada (districts), kebele(communities or farmer associations).There are about 550 warada in thecountry and government generallyaims to reach down to this level.

In the 2000 elections, the EthiopianPeople’s Revolutionary DemocraticFront, the same party which broughtdown the Government of ColonelMengistu in 1991, won a majority inthe House of People’s Representativeswith 472 seats out of a total of 548.Since the Republic has been declared,new economic policies have beenbrought into effect by theGovernment, with a view torevitalizing the country’s economythrough liberalization, privatization,and reorganization of differenteconomic sectors.


1 “Eyewitness: Where hunger reigns”, BBC News Online, 30 April 2000. Online athttp://news.bbc.co.uk/hi/english/world/africa/newsid_731000/731316.stm.

2 Ethiopian Central Statistical Authority, Population and housing census of Ethiopia, Analysis Report, 1994.

3 The Statesman’s Yearbook 2002.

4 COMESA website: http://www.comesa.int/

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2. Communication technology status

2.1 History and status oftelecommunications inEthiopia

Established over a century ago, theEthiopian TelecommunicationCorporation (ETC) is the oldest publictelecommunication operator (PTO) inAfrica. Although initially private, thecompany was placed undergovernment control at the beginningof the twentieth century, and was laterbrought under the control of theMinistry of Post and Communications.Already in 1952, telecommunicationservices were separated from thepostal administration, and fell underthe Ministry of Transport andCommunications (today Ministry ofInfrastructures).

The first long-distance telephone linein Ethiopia was established in 1894between Addis Abeba and Harar. Thenetwork began to expand from thenon, extending to other cities inEthiopia. After the end of the waragainst Italy, Ethiopia established theImperial Board of Telecommunica-tions, whose activity was funded fromdomestic sources and from the WorldBank. The Board had full financial andadministrative autonomy and was incharge of the provision and theexpansion of telecommunicationservices in Ethiopia. Today, thebackbone network is constituted froma variety of microwave, satellite andalso fiber optic links. Internationalaccess is provided by satellite and thePANAFTEL terrestrial microwavenetwork, connecting Ethiopia to otherSouthern and Eastern Africancountries via l inks to someneighbouring countries (see below).

The Imperial TelecommunicationBoard, which became the EthiopianTelecommunication Authority in 1981,was placed in charge of both theoperation and regulation oftelecommunication services. In 1996,

in the wake of the market reforms,the Government created a newseparate regulatory body byProclamation 49/1996, establishingthe Ethiopian TelecommunicationAgency (ETA), which has the objectiveof promoting the development of “highquality, efficient, reliable andaffordable telecommunicationservices”.

The same year, by Regulation10/1996, the Council of Ministers setup the Ethiopian TelecommunicationCorporation (ETC), to which all therights and obligations of the formerEthiopian TelecommunicationAuthority were transferred. ETC wouldoperate as a public enterprise underthe authority/supervision of the ETA,with the principal duty of maintainingand expanding telecommunicationservices in the country and providingdomestic and international telephone,telex, telefax and other communi-cation services. In this respect, it iscurrently deemed by the Regulationto be the only operator of anytelecommunication related service,including the provision of the Internetand public phones.

2.2 Network and capacity

Notwithstanding improvements inrecent years, the telecommunicationnetwork in Ethiopia is still among theleast developed in the world: withonly 324’729 fixed lines in servicein 2001, teledensity reached only0.54 per cent, despite the20 per cent growth realized in thelast two years (see Figure 3).1

Further improvements are foreseenin 2002, when ETC is planning toconnect 80’000 new lines. However,there is a large difference amongurban and rural areas, with about 60per cent of telephones concentratedin the capital city, accounting for lessthan the three per cent of the totalpopulation.

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The domestic network backbone isbased on microwave links, analogueor digital, connecting almost all theregions of the country. Analogue linesare being gradually substituted withdigital l ines by ETC, which isdeveloping several projects to extenddigital links at least to the larger citiesin the country. To complete thenational network, in 1994, four high-capacity (comprising 60 channels)DOMSAT (domestic satellite) groundstations were installed in Addis Abeba,Humera, Mekele and Gode.

This network is relatively reliable, withmost faults being due to powerinterruptions. In Addis Abeba thepower network is down about once aweek, while the situation is moredifficult in the countryside. However,interruptions are usually brief, and therate of failure not dissimilar from thatof neighbouring countries.

For its international terrestrial links,ETC operates a 155Mpbs digitalmicrowave link to Sudan and a34Mbps link to Djibouti. A link withSomalia is planned. There is also anold 60-channel analogue link withKenya, while Eritrea’s analogue linkwas severed during the war and hasnot yet been restored. The circuits link

Figure 1: ETC transmission system chart

Source: ETC Transmission Division.

Ethiopia to more than 20 countriesthrough the PANAFTEL microwavenetwork, in particular to otherSouthern and Eastern countries(Djibouti, Kenya, Uganda, Zambia andTanzania). Most other internationaltraffic is catered for via the Intelsatsatellite earth station which currentlyhas a capacity of 12’000 channels.

For technical purposes, the Ethiopianterritory has been divided by ETC intogeographical zones, not all of whichcorrespond to administrativedivisions. The zone enjoying thehighest degree of connectivity is, asmentioned, the capital city and itssurroundings, followed by thesouthern and the eastern zones,where other large cities, Nazareth,Dire Dawa and Harar, are located. Theleast-served area is in the southeast(see Figure 2): here, the territoryconsists of irregular terrain which isdifficult to cover, and the—largelynomadic—population is too sparse tojustify the cost of microwave links. Inthese circumstances, satell itetechnology complements theterrestrial network: 100 Gilat FaraWay8 channels and 120 Gilat DialAway(2-8 channels) VSATs, which can alsobe powered using diesel generatorsor solar panels, are currently in


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operation in the country, extendingcommunication services to rural areasand supplementing the service inareas around Addis Abeba. The ETCis planning to increase the number ofVSATs to 470 in the near future.

2.2.1 Fixed lines

The national switching capacity is550’000 lines, of which about340’000, i.e. only 61 per cent, arecurrently in use. ETC announced plansin 1998 to add a further 750’000 linesover the next 10 years which wouldraise teledensity to about 1 per cent.A fixed-line capacity of about 440’000is to be allocated to urban areas(serving a total population of around10 million) forecast for the end of2002. There is still a large unsatisfieddemand, with a waiting list of 153’000for fixed lines in February 2002. Theaverage waiting time to obtain a fixedline varies depending on the type ofcustomer: there are separate waitinglists for business and residential users,with the latter having to wait for upto 8 years to obtain a telephone.

In some cases, WLL technology isused to connect certain areas:currently around 6’000 lines are

provided in Addis Abeba, operating in4 of the 6 zones which make up thecity. However, this system, thoughquicker to install, presents highercosts and a shorter lifetime (5 to7 years), and uses a limited naturalresource, the frequency spectrum.Moreover, the current WLL speed inEthiopia (9.6 Kbit/s) allows only voiceand fax communication, virtuallyexcluding any Internet use. Thesystem is therefore unlikely to be usedwidely in the country.

There are expected to be 1’500 publiccoin/card phones in operation by 2002and 22’000 lines in ETCs public calloffices. The number of clandestinephone shops (which charge a premiumover ETCs tariffs) is unknown, thoughthey can be in Addis Abeba.

The provision of terminal equipmentis fully liberalized, subject to ETA type-approval which is required before ETCcan install a telecommunication line.Satellite phones are not allowed,except under exceptionalcircumstances. Frequency monitoringis not yet carried out as ETA lacks thenecessary equipment. Direct-to-home satellite television was not

Figure 3: Fixed and mobile lines network in Ethiopiaand fixed-line growth rate in selected countries

Note: Figures are for fiscal year ending 8 July. Figures for 2002 are projections.Source: ITU World Telecommunication Indicators Database and Ethiopian Telecommunication Corporation.

Main Lines and Mobile Lines in Operation

156,538

231,945

343,000

137,731

40'00027'532

17'727

0

100,000

200,000

300,000

400,000

1994 1996 1998 2000 2002

Fixed

Mobile

Main line growth rate

-10%

0%

10%

20%

30%

40%

50%

1994 1996 1998 2000

Kenya

Uganda

Tanzania

Ethiopia

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allowed until quite recently, althoughthere have been many clandestineinstallations. Recently, it becamepossible to obtain a TVRO licence,which costs Birr 1’000 for the initialapplication, and Birr 336 per year(respectively about USD 115 andUSD 40).

Directory services are updated every4 years. Mobile numbers and Internetaddresses wil l be l isted in theupcoming 2002 directory, however aweb-based version is not currentlyplanned.

2.2.2 Mobile

In contrast to other developing or leastdeveloped countries, in Ethiopia theuse of mobile phones is not yetwidespread. The first, and still theonly, mobile service in the country isthe GSM facility launched by ETC in1999 under the name of “EthioMobile”. ETC initially underestimatedthe market for mobile services, whichrapidly reached its maximum capacityof 28’000 subscribers, at which pointnew subscriptions were suspended (inmid-2001) until new capacity could beadded. Initially, ETC also soldhandsets, but has since dropped thisas it was unable to fulfill customerdemand for greater variety, resultingin a large number of users importingtheir own handsets. For the moment,mobile services cover the area ofAddis Abeba and its surroundings,and the cities of Debre Zeit, Nazareth,Mojo and Sodore, for a total of 120Km of road coverage. There are fourgateways to the PSTN from the GSM 2002, after which time coverage willbe expanded and new services will beimplemented. Doubts remain,however, as to the demand for SMS,as the technology is designed tosupport Latin fonts, and will not enablemessaging using the Amharic fontsused by the inhabitants of Ethiopia.

As with fixed-line and Internetservices, ETC practices an unusualbil l ing system: ETC calls eachcustomer every month tocommunicate the amount of the bill,which then has to be paid directly atthe ETC offices. Due to backlogs in thesystem, it seems that customers are

typically paying bills four months laterthan the billed month (for example,bills for November 2001 were beingpaid in March 2002).

Nevertheless, the cost of the mobileservice is relatively affordable inEthiopia compared with othercountries (See Table 4)—mobile tomobile calls are charged at 0.75 Birrper minute (about 9 US cents). Theinit ia l subscr ipt ion fee is st i l lrelatively high, although the monthlyrental is a lso below average(see Figure 4). Perhaps surprisingly,the low tariff is not a barrier toprofitability, as is evidenced bycomparing the service with Ghana’s,which has 90’000 users with a higherusage dimensioning than the ETCservice (18m Erlangs in Ghanacompared with 25m Erlangs for ETC)and generates the same amount ofrevenue as Ethiopia’s 30’000 users.

Notwithstanding the evidentdifficulty of ETC in satisfying thegrowing (quantitat ive andqualitative) demand for this service(the waiting list now is over 40’000),there are no plans to allow anotheroperator to enter the market in thenear future.

2.2.1 The digital data network(DDN)

ETC began to deploy a l imitednumber digital circuits for customersin late 1999—following increasingdemand for leased lines for Internetaccess, 5 lines were deployed thatyear, growing to 10 by December2000, although 2 are used by ETC.X.25 has not been deployed in thecountry and so far is not envisaged.In 2001, a dedicated digital datanetwork (DDN) service wasdeveloped which now provides theunderlying infrastructure for ETC’sInternet service and will provideother data-related services such asISDN, data transmission for bankingnetworks and distance educationtransmissions, in the near future. Atotal of 9 c i t ies have beencommissioned (Jimma, Bahir Dar,Mekel le, Desale, Sheshemene,Awessa, Nekemti, Nazareth and DireDawa), with a further 6 points of

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Figure 4: Fixed and mobile telecommunication tariffs

Source: ETC.

1. Fixed 1 USD = 8.56 Birr Connection fee 305 Birr (35.6 USD) Monthly rental: Business 17 Birr (2 USD) Residential 8 Birr (1 USD) Local calls 0.2 Birr for 6 minutes (0.02 USD)

National long distance calls: 0.2 Birr/pulse (0.02 USD) Duration of pulse Normal* Reduced* 16-50 Km 60 sec 60 sec 201-300 Km 12 sec 18 sec 551-700 Km 6 sec 9 sec

International call tariff: Africa 13 Birr/min (1.5 USD) Europe 15.98 Birr/min (1.87 USD) Asia 19.68 Birr/min (2.3 USD) America 21.35 Birr/min (2.5 USD)

2. Mobile Subscription 543 Birr (63.5 USD) Deposit for security 408 Birr (47.7 USD) Monthly rental 50 Birr (5.8 USD) Call charge: Mobile to mobile 0.75 Birr (0.09 USD)

Mobile to fix From 0.33 (local, off-peak tariff) to 2.72 (long distance,peak tariff) Birr/min (repectively 0.04 and 0.32 USD)

International Call Charge Call Charge for fixed telephones + 0.72 Birr/minute(0.04 USD)

Table 4: Mobile cost and revenues (selected African countries)

Note: Data refer to year 2000. Data for Ethiopia are for 2001.Source: ITU World Telecommunication Indicators 2002.

Country Cost of 3 minute Mobile Mobilelocal call (USD) subscribers revenue (USD)

Ethiopia 0.26 28’000 8’262’896

Uganda 0.36 188’568 49’705’072

Mozambique 0.46 51’065 22’486’678

Zimbabwe 0.50 309’000 45’708’048

Kenya 0.59 127’404 13’754’971

Zambia 0.68 98’853 1’532’318

South Africa 0.69 8’308’000 3’040’345’856

Ghana 0.90 130’045 2’521’334

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A.A Awassa D/Zeit Nazareth Dessie Shashe-mene

Mekele B/Dar Jima D/Dawa Nekempt

AA 100 1100 200 400 1250 1000 2500 1600 1300 1750 1235Awassa 1100 - 970 940 2200 100 3550 2400 1000 2300 1550D/Zeit 200 970 - 200 1350 870 2600 1800 1350 1650 1370

Nazareth 400 940 200 - 1425 825 2700 1985 1450 1500 1550Dessie 1250 2200 1350 1425 - 2200 1315 1250 2450 1465 2035

Shashemene 1000 100 870 825 2200 - 3475 2500 1025 2215 1550Mekele 2500 3550 2600 2700 1315 3475 - 1565 3515 2500 2900B/Dar 1600 2400 1800 1985 1250 2500 1565 - 2175 2685 1450

Jima 1300 1000 1350 1450 2450 1025 3515 2175 - 2950 800D/Dawa 1750 2300 1650 1500 1465 2215 2500 2685 2950 - 2930

Nekempt 1235 1550 1370 1550 2035 1550 2900 1450 800 2930 -

Initial Subscription Monthly Rental (Birr) (Birr) For 27xx NTU 5,523.00 69.00 For Local lead 1,400.00 41.00 For Port -- 832.00 For Node -- 884.00

Monthly rental charge in Birr for transmission of Digital Leased line point to point circuit

Tariff for point to point Digital Leased line circuit for < 64kbps

DDN Tariffs

Table 5: Digital data network in Ethiopia

A 19.2Kbps International link costs USD 9232 / month with a 20 per cent reduction for COMESA, while a64Kbps lnternational link costs US 13,348 with a 30 per cent reduction for non-profit organizations.

No.Regional Name of Population Roll Out Target*Administration Town Size 2001/02 2002/03 2003/04 2004/05 2005/06

1 Tigray Mekele 99,846 3 10 13 16 202 Amhara Bahir Dar 99,024 6 17 22 28 34

Amhara Dessie 100,233 2 7 10 12 143 Oromia Nazareth 131,677 2 7 10 12 14

Oromia Jimma 91,533 6 17 22 28 34 Oromia Debrezeit 75,573 2 7 10 12 14 Oromia Nekemte 48,676 2 5 6 8 10 Oromia Shashemene 53,642 3 10 13 16 204 S.N.N.P Awassa 71,244 2 7 10 12 145 Addis Ababa Addis Ababa 2,147,126 66 194 258 324 3886 Dire Dawa Dire Dawa 169,797 6 19 26 32 38

Total 3,088,371 100 300 400 500 600

* Refers to number of Customer Connection Points.

presence (PoP) located in the AddisAbeba area, including one ISDNswitch in Arada. The network linksbetween the PoPs are 2Mbps and locallinks can be provided at up to 1Mbps.

The provisional licence proposed byETA for the DDN has the followingtargets, which if not met, are liableto a penalty of Birr 300 forconnection point that is not installed:

12


2.3 Regulation and policy-making

Telecommunication and informationtechnologies have not yet beenconsidered a development priority inEthiopia, which is still a relativelyclosed society, little affected byglobalization, and is still emergingfrom almost two decades ofcommunist military rule and the warwith neighbouring Eritrea. The countryis only now beginning to discussliberalization of the sector and thepromotion of free flow of information.Accordingly, all telecommunicationsinfrastructure and value-addedservices are still owned by the State.

Telecommunications in Ethiopia fallunder the authority of the Ministry ofInfrastructures, a sort of ‘supra’ministry, which, besides telecommuni-cations, also oversees postal services,energy, and transportation. TheMinistry, and specifically thetelecommunication department, isresponsible for the definition ofnational telecommunication policy,excluding radio and televisionbroadcasting, which fall under theauthority of the Ministry of Informa-

tion and the associated BroadcastingAgency, which has just beenestablished. In Addis Abeba, there arejust three radio channels, which arestill owned by the Government, andone TV channel, transmitting inAmharic, Oromo and Tygrigna. Foreignchannels can be accessed via satellitedishes delivering subscription-baseddigital TV via the South Africa-basedDSTV service. Since 1994, the presshas been liberalized and today thereare around ten private newspapers inthe country, however, distribution islargely confined to Addis Abeba.

Following the 1996 Proclamation andRegulations, the InfrastructureMinistry also has control over theregulatory authority (ETA) to which itappoints the General Manager andapproves the budget (Proclamation49/1996). The Agency was created asan independent body to license andsupervise telecommunication serviceoperators, issue equipment standardsand manage the use of radiofrequencies. ETA operates as agovernmental agency, with financialand polit ical dependence.Administratively, the Agency is dividedinto three directorates (standards and

quality control, licensing andfrequency management) and hasfive services (legal, planning andprogramming, finance, publicrelations and audit service). Atotal of forty people are currentlyworking in the organization, butonly a small portion of them,about seven or eight, haveprofessional qualifications.

ETC is the incumbent publictelecommunication operator andhas a monopoly over alltelecommunication services inthe country (fixed, mobile,Internet and datacommunications). ETC has tocarry out its functions inaccordance with governmentpolicies and priorities, and itsactivities are supervised by agovernment-appointed body(Regulation 10/1996).Nevertheless, the Corporationoperates as a commercialcompany, it has its own budget

Figure 5: Phone shop inAddis Abeba

13

and board of directors, which decidesthe company strategy and designatesthe General Manager, whosenomination has then to be approvedby the Government.

2.4 Privatization

Notwithstanding the monopoly of ETC,in recent years the Government hasbeen planning to partially privatize thecompany, aiming to allow theparticipation of a strategic investor,which should bring new funding andnew management techniques andskills to ETC. To permit privateparticipation in telecommunicationservices, in 1998 the Governmentamended the Investment Proclama-tion, providing for private companies,national or foreign, to invest in thetelecommunication sector inpartnership with the Government(Proclamation 116/1998). Thepossibility of selling part of ETC sharesto a private partner is currently beingstudied by a private consultingcompany, PriceWaterHouseCoopers(PwC), which is analysing the currentstatus of ETC and the possible termsof the partnership. The results of thestudy were scheduled to be completeby the end of June 2002, to besubmitted to ETC for a decision and acall for tenders. ETC’s revenues lastyear amounted to aroundBirr 800 mill ion, i.e. almostUSD 100 mill ion (Figure 3).2

Investment in the telecommunicationsector has to be approved not only bythe Investment Authority, but alsodirectly by the competent ministry(Ministry of Infrastructures).

Although there is clear intent by theGovernment to open ETC to privateinvestment, there is sti l l someuncertainty about the timetable forthis change. It is also unclear whatthe entry conditions for the investorwil l be—sometimes a period ofexclusivity lasting 3 to 5 years in theprovision of telecommunicationservices by the monopoly company isguaranteed to the new entrant inexchange for a higher investment. Ifthe Ministry grants exclusivity to ETCfor all telecom services, this maygenerate more revenues for theexchequer, but demand may remain

unsatisfied owing to the inherentlyinefficient nature of monopolyoperations and the imperative of aquick return on investment for theinternational investor.

2.5 Licensing

Prior to the reform of thetelecommunication sector in 1996,telecommunication service licencesdid not exist3 in the telecom sector inEthiopia: the service was under thecontrol of the Government, whichacted as operator, regulator andpolicy-maker. More recently, however,the necessity of opening the marketto new investors created the need fora structured licensing system toestablish conditions and requirementsfor the provision of telecommunicationservices, which implied the creationof a regulatory authority (ETA) withthe power to “license and superviseoperators of telecommunicationservices”.4

Licensing procedures and guidelineswere established under Regulation 47/1999, and a licence for each of theservices currently provided by ETC hasbeen drafted by the Agency on thebasis of general principles oftelecommunication services, i.e. highquality, efficiency, reliability andaffordability. The licensee has a dutyto comply with the conditionsestablished in the licence regardingthe quality of service, tariffs, and hasto fulfil roll-out and service targetsestablished by ETA in line with nationaltelecommunication policy as set outby the Government.5

These licences, which have alreadybeen drawn up by the Agency andsubmitted, are still being discussed byETC, which has not signed them.There is an apparent lack ofagreement between ETC and ETA onsome licence requirements, inparticular those regarding the roll-outof services. The refusal of ETC to signthe licence, at least for the moment,and the inability of ETA to enforce itsdecisions, undermines the authorityof the regulatory agency and pointsto the continued concentration ofpower with the incumbent, which isstill the major and most influential


14


actor in the telecom field, botheconomically and politically.

The establishment of the agency andof a set of licences and conditions isnevertheless important in view of theentry of a new investor in thecompany. However, the questionremains as to the control ETA will beable to exert over the operator in thefuture, on which the effective andrapid development oftelecommunication infrastructuresand services in the country willdepend.

2.6 Sector liberalization

As indicated above, franchise overtelecommunications services by ETCis almost total, except for the sale ofcustomer premises equipment, whicheven for private use, is still subject toETA authorization. The use of anytelecommunication technology thatwould enable bypassing the localnetwork is strictly forbidden. At themoment no licences are granted toprivate operators to sell or reselltelecommunication services, whetherbasic or enhanced.

This also means that independentVSAT connections and satellite phonesare not allowed, and call-back isillegal—punishable by a fine and 2 to5 years’ imprisonment.

With very few exceptions, VSATterminals are used by ETC only, toconnect less served and rural areas.In the last few years, three entitiesobtained a special authorization tohave their independent VSAT linksupplied by ETC: the Civil ServantsCollege, which is running a distancelearning course, the UN EconomicCommission for Africa (UNECA), forits Internet connection, and the WorldBank, in the framework ofdevelopment activities in Ethiopia.

Even in the above-mentioned caseswhere exceptional authorization hasbeen granted, the beneficiaries haveto undergo several limitations: UNECAmay use VSAT, but this is officiallyowned by the Government. The useof the satellite link is restricted toInternet and data transfers. Voicecommunications must always passthrough the terrestrial network, andthe connection may be used from

Table 6: Ethiopian telecommunication policy

Source: Council of Ministers Regulation No. 10/1996; Proclamation No. 49/1996; Proclamation No.116/1998;Council of Ministers Regulation No. 47/1999. Online at http://www.telecom.net.et/~eta.

Telecommunication services

Provision of fixed or mobiletelephone services, Internetand data

Reselling of voicetelecommunication services

Reselling of Internet services

Cybercafés

VSAT connections

Voice over Internet (VoIP)

Call back

Telecommunication equipment

Legal status

ETC has sole franchise. Forbidden for private companies unless inpartnership with the Government (currently being investigated).

Not allowed, but currently tolerated. There are many unadvertised phoneshops in the country.

Not allowed for anyone except ETC to act as ISP.

Not officially allowed, but there are several business-centre type Internetcafés in Addis Abeba, which are currently tolerated. Some have beenclosed for openly selling VoIP services. There is not a clear policy on theissue.

Not possible for individuals or companies to have their independent VSATconnection.

Not allowed. VoIP services are illegally provided by some cybercafés inAddis Abeba.

Illegal, punishable with a fine and imprisonment.

Initially, ETC also had a monopoly on telephone handsets. Today, theauthorization of ETA is required to use or sell imported equipment.

15

UNECA headquarters only, not fromemployees’ homes. To have theprivilege of an independentconnection, UNECA is paying theGovernment a ‘compensation’ or‘bypass’ fee. ETC is also concernedthat UNECA allows journalists,students or other visitors to connectto the Internet from its facilities. Thesame is true for the College of CivilServants: the service is available onlyinside the College, and is not madeavailable for students externally, eventhough many resources of the Collegecould be accessed directly by thosewho could not afford an Internetaccount. From home, studentscurrently have to obtain a normalInternet subscription with ETC.

The environment for the reselling ofservices is more complex, the many


phone shops in the streets and thequite visible Internet cafés seem tobe tolerated by the authorities,although the operation of cybercafésis officially discouraged by ETC, whichis concerned about the possible useof voice over IP (VoIP) and theconsequent decrease of internationaltraffic revenues.

Given the widespread practice ofreselling communications services,ETA is currently planning to allowprivate entities to resell telephoneservices subject to the granting of alicence. ETA considers that in this wayit could have control over resale, whichis currently not supervised by thepublic authority. It is interesting tonote that this process does not havethe purpose of liberalizing the serviceand fostering competition but aims to

Box 1: Phone shops: illegal and expensive

Despite concernsthat the reselling ofphone servicescould be detrimentalto customers bybeing too expensiveor without guaran-tee of quality orpricing, telephoneshops are widelypresent in Ethiopia.The surprise is thatthe large number ofshops in the market(often very close toone another) doesnot seem to stimulate competition: all of them sellthe service at the same price, at Birr 0.75 minute(0.09 US cents) (for local calls), about three timesmore expensive than the service provided by ETC’spublic payphones.

Explanations include the fact that telephone linesare difficult to obtain, that they are often tooexpensive for the average Ethiopian, and that thenumber of public phones is quite low: there areonly about 1’500 public phones in the country andprepaid cards have not been around long, socommunications had to be paid for with coins. ETC’sprovisional licence roll-out targets for the financialyear 2001/2002, establishes that the number ofpublic phones should grow to 6’500 in the next fiveyears, and that 22’000 call offices are to be set up

in rural and remoteareas, to cover84 per cent of thepopulation. Theobjective of thisd e v e l o p m e n tproject is to have atleast one publicphone for eachfarmer association,which is thesmallest cell of theEthiopian society.6

However thesetargets have not yetbeen agreed upon

by the ETC, which did not sign the licence, thereforethey will not become effective until the entry intoforce of the licence.

The same dynamics are behind the spread ofcybercafés and public Internet access points: the costof computer equipment (there are only an estimated60’000 PCs in the country) and Internet connectionare too high for individuals, therefore many peopleuse public points of access. ETC is planning to establishInternet centres around Ethiopia (one pilot Internetcentre has been created in ETC headquarters in AddisAbeba, with two computers connected to the Internetand a fax machine), however there is evidence thatthis task is too burdensome for the company, whichin the last two years has not been able to offer anadequate service to the population.

Source: ITU case study research.

An ETC public phone area

16


give ETA more control over themarket. Under the licence agreement,the Agency would fix price caps andestablish specific conditions for theprovision of the service to protect thecustomer (clear indication of tariffs,indicators of time, etc). This strategyreflects a certain lack of confidencein, or familiarity with, the marketmechanism in providing the consumerwith desired service levels.

Control over customer equipmentcovers any kind of telecommunicationequipment, from the most complexrouter to the simplest telephonehandset. Following the 1996Proclamation, ETA also has to approveTVRO (television receive-only) andradiocommunication equipment, andcan specify any other equipment thatrequires its approval. Approval is subjectto compliance with certain standards,which have been specifically establishedby the ETA, and are listed in a two-volume compilation.

There are no blanket licences orgeneral approval for telecomequipment: in the case of importationof equipment, the importer (a privateindividual importing an handset forprivate use, or a company importingequipment) must ask ETA for approvaland may then sell or connect theequipment to the telecommunicationsystem. Any person found inpossession of equipment without

authorization may have equipmentconfiscated by the Agency, and in anycase ETC can refuse to connectunauthorized apparatus.

2.7 International traffic andrevenues

International traffic has shown steadycontinuous growth in the past tenyears. The main destinations forinternational calls are Europe, followedby United States and Asia. ETC had atotal international outgoing minutesin 2001 of 13’580’200 and incomingminutes of 43’677’930. Thesegenerated a total internationalrevenue of Birr 312’968’000(Figure 6).

As for many other developingcountries, international traffic (andespecially incoming traffic) representsone of the major sources of revenuefor ETC, accounting for up to 70 percent of total revenues. However today,following the reduction of internationalsettlement rates, and the spread ofVoIP, the international portion ofrevenues constitutes less then the40 per cent of the total, while agrowing place is being taken by mobileand Internet services.

For the present, as ETC is the onlyoperator, rebalancing of tariffs andinterconnection are not an issue, andhave not been dealt with by ETA.

17

Figure 6: The Ethiopian Telecommunication Corporation's sources of revenue

Note: Figures are for fiscal year ending 8 July. Figures for 2002 are projections. One million Birr =USD 116'822.Source: ETC.

ETC revenues by source (thousand Birr)

0

200,000

400,000

600,000

800,000

1,000,000

Data andInternet

27,900 42,200 61,200

Mobile 68,000 104,600 108,000

International 293,400 313,000 302,000

Domestic 269,500 318,200 362,000

2000 2001 2002

ETC revenues 2000/2001 (fiscal year ending 8 July): 802 million Birr (US$ 93.8 million)

Mobile, Data and Internet

20%

Local and long

distance domestic

calls44%

Int'l calls36%


1Ethiopian Telecommunication Corporation.

2Ethiopian Telecommunication Corporation.

3However for the use of radio frequencies a licence had to be granted by the Licensing and Standard Divisionof the former ETC. The same division also approved fax machines imported by users.

4Proclamation No. 49/1996 to provide for the regulation of telecommunications. Online atwww.telecom.net.et/~eta.

5For the roll-out target see Annex 1 of the License conditions for the provision of public switchedtelecommunication service, ETA, 2002.

6See section 1 “Country background”.

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3. Internet strategy and policy

3.1 Status of the Internet

The use of the Internet in Ethiopiabegan in 1993 when the UN EconomicCommission for Africa (whoseheadquarters are in Addis Abeba)established a store-and-forward e-mail service called PADISNet (PanAfrican Documentation andInformation Service Network) whichconnected daily via direct dial calls toGreenNet’s Internet gateway inLondon. Because no other serviceswere available, the facility was heavilyused by international organizationsand NGOs, but also by someacademics, individuals and privatecompanies. At its peak the service hadabout 1’200 users.

In the following year, the US-basedNGO, HealthNet, established a nodeat the Medical Faculty of the Universityof Addis Abeba, which provided e-mailaccess to medical researchers via theHealthSat/VITA Low Earth Orbit (LEO)satellite.

In 1996, a broadly constituted cross-sectoral national Internet workinggroup supported by the EthiopianScience and Technology Commission(ESTC), called Bringing Internet toEthiopia (BITE), drew up a detailednational Internet proposal. This,together with the PADIS/HealthNetservices, helped build significantdemand for full Internet accesswhich was ultimately provided byETC in January 1997. Following asurvey of the potential market,Global One was contracted tocommission the service (calledEthioNet), carry out training andprovide the upstream Internationalbandwidth (256Kbps initially) viaETC’s existing satellite earth stationand circuits to the United States(backhauled to central Addis Abebavia microwave). Because ETC did nothave a leased line data service at thetime, Internet services were limited

to dial-up access and local websitehosting and development.

The ETC took over the administrationof the .et Top Level Domain (TLD) fromthe technical administrator at UNECAwhen the EthioNet service waslaunched, and although it hasdeveloped a tariff for hostingsubdomains of .et, it has yet to allowregistration of new subdomains.

Training for users is provided via theETC’s Ethiopian TelecommunicationsTraining Institute (ETTI) and freetelephonic technical support is givenfor setup and e-mail issues, whiledirecting other support queries to itshelpdesk e-mail address.

Within a month of its launch EthioNethad over 600 users and this grew to1’750 by February 1998 (including200 in other towns), 2’500 in December1999 (when bandwidth was upgradedto 1Mbps, with an additional 1Mbpsadded in June 2000) and about 3’500by March 2001, at which point thefacility was deemed to have reachedmaximum capacity. In line with ETC’sgenerally high level of servicestandards, and because performancelevels would have suffered by addingmore users, no more subscribers wereaccepted in anticipation of an upgradeto the service which was being plannedwith assistance from UNDP’s InternetInitiative for Africa (IIA) programme.Although the project took some timeto begin, UNDP provided funding ofUSD 900’000, with the EthiopianGovernment contributing a furtherUSD 700’000 to establish 8 more PoPsin the country: 4 large PoPs (64 dial-up modems) in Mekele, Bahir Dar,Awassa and Jimma, and 4 smallerones (32 modems) in Dessie, Gondar,Lekemte and Dire Dawa. These PoPswere connected to the Addis AbebaInternet gateway via domesticsatellite and became operational inJune 2001.

19


Because ETC provides a local-call tarifffrom anywhere in the country to dialits Internet service, these points ofpresence (PoPs) are largely a cost-saving exercise to limit subsidizationof long-distance calls. Also, whenleased line Internet access is requiredoutside Addis Abeba, the PoPs will beable to provide them much moreefficiently from the 8 major cities.International link congestion is nowquite severe during the day (seebelow), with the incoming bandwidthfully saturated from about 07:00 to17:00 hours during which time about20 per cent of the incoming packetsare dropped. As a result, ETC is in theprocess of upgrading the link with anadditional 2Mbps outgoing and 8Mbpsincoming bandwidth to be provided byNew Skies Satell ite (NSS) forUSD 25’000 per month using existingtransponder leases. The existing2Mbps (symmetric) internationalbandwidth is provided by FranceTelecom (FCR), for which it pays aboutUSD 24’000 per month.

Due to delays in commissioning theupgrade to the service, a considerablewaiting list of potential subscribers

accumulated by the time the newservice was operational. This tookplace in July 2001 and since then thenumber of accounts has grown to justover 6’000. The chart below (Figure 7)shows the number of accounts addedand cancelled during the period July2001 to February 2002. As can beseen, the growth in number ofsubscribers has tailed off considerablyin last few months, indicating that thebacklog was cleared by about October2001 and the potential dial-up user-base is beginning to reach its peak.EthioNet estimates that there are10 users per dial-up account, givingthe total number of users at about60’000. Most other ISPs estimatebetween 3 and 7 users per dial-upaccount, so this estimate is probablyoptimistic.

Despite the availabil ity of thenationwide local call tariff for dial-upInternet users, the distribution ofInternet users is still strongly skewedto the capital, with subscribers outsideof Addis Abeba accounting for onlyabout 6 per cent of the total user base.This is partly attributable to the lowlevel of computerization outside the

Figure 7: Internet accounts added or canceled (by year)

Source: Ethio Internet.

20


capital, but is probably more relatedto the limited availability of telecominfrastructure. ETC does give lineinstallation priority to signed upEthioNet subscribers who also requirea telephone line, but this is still subjectto availability of infrastructure.Unfortunately, the wireless local oop(WLL) system that has been deployedin some areas does not adequatelysupport data communications.

These are not problems simplyconfined to areas outside the capital—even in Addis Abeba lack of phonelines and access to computers is asevere problem for many potentialcustomers, as is demonstrated by theusage statistics on the internationallink. Traffic falls off dramaticallybetween 1700 hours and 0800 hours,showing that there is l imitedresidential consumer use, with mostof the activity taking place duringoffice hours using business phonelines and computers.

As of December 2001, 66 per cent ofthe user-base comprised privateaccounts, 5 per cent was government,20 per cent internationalorganizations, embassies andbusinesses, and 9 per cent academic,health and agriculture. In the twoyears between December 1999 andDecember 2001, the total number ofdial-up minutes per month more thandoubled, from 3’443’549 to 7’768’617,which translates to a small decreasein usage during that period, from 23 to22 hours per month per user. Duringthe same period the number ofaccessible dial-up lines grew from224 to 1’088, of which 384 are nowlocated outside Addis Abeba. Monthlyrevenues during this period increased190 per cent, from 2.3M Birr/monthto 4.4M Birr/month. Interestingly,almost all of this increase took placebetween March and December 2001,during which time the user-base grewby 160 per cent.

EthioNet has provided ten 64Kbpsleased lines so far, with most havingbeen made available to governmentorganizations and some internationalorganizations such as UNECA. Thereis a waiting list of about 55 for

additional leased lines, however thesewill only be deployed once the tariffand procedures for allocating leaseddata lines are finalized by DDN.

EthioNet also has a Web developmentand hosting unit called EthioPages. Itcurrently hosts websites for a total of69 organizations, including 18 NGOs,23 government organizations and27 private companies (see Table 7).

3.2 Pricing structure forInternet services

The tariff for the EthioNet’s dial-upservice is based on five subscribercategories as shown in Table 8 (C1-5).The fees established at the launch ofthe service were based on theexpectation of fewer customers andwere subsequently revised downwardsby 25-50 per cent in November 1997and have since remained as Table 8.

Website development is also providedby ETC and has a complex pricingstrategy:

• Uploading & verifying pages -25 Birr per screen page.

• Web page Development (Textfile) - 100 Birr per screen page.

• Scanning artwork - 50 Birr /image.

• Scanning artwork with animation- 300 Birr per image.

• Multimedia file creation (wav,PDF, jpg etc) - Birr 150 perimage/file.

• Real Audio media production -40 Birr/ file hour

• Real Video production at 50 Birr/file hour.

• Interactive web page customizedformat using HTML Coded Forms(CGI, Java etc) - 200 Birr perpage and 5 Birr per custom field.

• Logo design - 80 Birr/image.• Database development - 80 Birr/

hour.• Banner advertising - 400 Birr/

month.• Hard disk rental - 17 Birr/MB/

month (html), and 42 Birr/MB/Month for multimedia files.

• Web page formatting usingTables - Birr 50 per file and 2 Birrper table element.

21

Table 7: Websites hosted by ETC


NGO Government Business

AAU Technology Fac. AAMP Abeba Gidey PLC

Abebech Gobena BDU Afro Ostritch PLC

Alemaya University DPPC Altastar PLC

APAP Ethiopian Map Authority Ambass Enterprises

CFAO-EOC Ethiopian News Agency Ergib Trading plc

Debrebirhan Public Lib. Experience Eth. Travel CPU

GC MS EPA EET

GTZ-IFMP EIC ELICO

IB CR ESTC Ethiopia Today

Italian Cult. Inst ETA Habesha Trading

Jimma University Ethiopian Trade Point Jiva Comp. Academy

Unresco FEMSEDA Lalibela Hotels

UNCDF MTSE Nature Lovers Tour Operator

UNDP-EUE National Bank NTC

Wolisso City Council NCIC Pact Ethiopia

UNFPA/CST AA TCDE Sheba Tannery

The British Council US Embassy St. Gabriel Hospital

Forum for Street Children Walta Info. Center Sur Construction S.C

Royal Netherlands Embassy TCDE

Ministry of Information and Culture of Ethiopia

Thomas Chako

Ethiopian Foot Ball Federation United Tebarek

Ethiopian Customs Authority WARYT

Enweyay Civic and Social Education Center

Yenegew Sew

Axum International Tour and Travel

Ross Training Resource Center

Dire Dewa Food Complex

Infotec PLC


22


Table 8: Internet service costs

Source: Ethio Internet.

Setup Monthly

subscription Service

Additional hours

Individual/Private Company (C1) 56 USD 19 USD

8 free hrs a month 1MB free storage

4 USD

Individual/Private Company (C2) 75 USD 34 USD

15 free hrs/month 1MB free storage

4 USD

International NGO's, Embassies and Business Sectors (C4)

113 USD 75 USD 40 free hrs/month. 2MB free storage

4 USD

Public Education, Health and Agricultural Sectors: (C5) 38 USD 25 USD

40 free hrs/month 2MB free storage

2 USD

Other non-profit organizations (C3): 56 USD 38 USD

40 free hrs/month 2MB free storage.

2 USD

Additional hard disk space 2 USD month per MB

Additional e-mail boxes 5 USD month (C3, C4 and C5 accounts qualify for 2 free e-mail addresses)

Installation or configuration of the dial-up account by bringing the machine to EthioNet's premises costs

20 USD

• Image map layout - 150 Birr.

EthioNet customers automatically haveweb space under their username -www.telecom.net.et/~userid. EthioNethas also recently provided for domainregistration under the .com.et domain.Currently it is possible to registerwww.telecom.net.et/company_namefor Birr 17 per month. Registration ofwww.company_name.com.et costs Birr417 for setup and Birr 500 per year.

Leased line fees have been provisionallyset at USD 500 for 500 connection,USD 200 for setup and USD 1’000 permonth for 64Kbps CIR on theinternational link. Uncommittedbandwidth or reduced charges for lowerbandwidth on the International link arenot currently envisaged. IP addressspace will be billed at Birr 18 per yearper IP number and leased linecustomers qualify for up to 10 free e-mail addresses on the telecom.net.etmail server.

While US Dollar rates are quoted formost tariffs, these are payable in Birrat current rates of exchange forEthiopian nationals and businessesowned by Ethiopians. The tariffs arealso payable in Birr for foreignnationals and organizations, but theNational Bank of Ethiopia keepsaccount of these payments for ETC’shard currency allocation. An additional15 per cent sales tax is added to thetotal payment. Bills are currentlyissued and paid in Addis Abeba.Because it is not yet possible toconduct wire transfers between bankbranches, the outlying areas havedifficulties in getting the payment toAddis on time, resulting in extracollection overheads. Plans are beingmade to have bills issued at the localPoPs where administration andsupport technicians will be stationed.

All of the cybercafés in Addis Abebasurveyed charged the same rate forInternet access - Birr 0.75 per minute

23


and Birr 1 per black&white pageprinted and Birr 8 for colour. Othercommonly used charges are Birr 0.35/page for photocopies (0.25/page formore than 1’000 copies), Birr 7 perA4 scan or Birr 5 per scan for morethan 5.

Calls to the Internet from anywherein the country are charged at standardlocal call tariffs - Birr 0.28 per6 minutes, or approximately 0.33 UScents per hour, among the lowest localcall tariffs on the continent.

This gives an average total monthlycosts for a private dial-up subscriberusing 22 hours a month (excludingtelephone line rental which is Birr 8per month for residential lines and17 Birr per month for business lines)at USD 69.3, which, despite the lowlocal-call tariff, is amongst the highestin Africa due to the high subscriptioncharge.

Import duties for PCs and IT relatedequipment are divided into twocategories:

a) If PCs are imported fortelecommunications-related andoffice activities, the import dutieswill be 5 per cent;

b) If PCs are imported for resale byany business, then the importduty will be 40 per cent.

Plans are currently being made by ETCto revise dial-up rates downwards, tointroduce per-minute charging(instead of the flat rate regardless ofnumber of hours used up to themaximum) and to reduce the numberof tariff categories to two (merging C3and C5). In addition it is anticipatedthat a prepaid option will be madeavailable, most likely using the Rodopiplatform (www.rodopi.com). This willalso likely help address bill collectionproblems, which have resulted in asignificant level of non-payments.

In 2001, ETC derived a total revenueof Birr 42’200’000 for data andInternet services, the bulk of whichmost likely comes from the Internetservice as the data service has only

recently been launched. Theserevenues are forecast to grow by45 per cent in 2002, to 61’200’000.While still only representing 0.5 percent of ETC’s total revenues in 2001,data and Internet revenue is thefastest growing component.

3.3 Regulatory status ofInternet

In January 2002, a five-year licencewas proposed by the regulatoryagency, ETA, for ETC to operate anInternet service, for a licence fee ofBirr 100’000, however, as with theother telecommunication licences, ETChas not yet signed. Some initialdiscussions have also taken place toissue private ISP licences, for whichthe same fee is envisaged, howevercurrently there has still been nodecision as to when these licences willbe issued.

Some of the interesting features of thelicence include:

• The Licensee shall obtainapproval in writing from theAgency to make substantivechange to the Network orNetwork Architecture from theconstruction and physicaldescription of the Networkcontained in the approvedLicensee’s proposal.

• The Licensee shall take measureson its own and as and whendirected by the Agency at its owncost to bar carriage of telephoneand fax traffic over Internet bythe subscribers.

• The Licensee shall not transmitany message or communication,which infringes literary andartistic ownership in any form orinconsistent with the laws of theFederal Democratic Republic ofEthiopia.

• Logins where the identity oflogged-in user is not knownshould not be permitted.

Detailed rollout targets for the licenceholder have also been defined which

24


require ETC to provide an additional36’000 subscribers in areas outsideAddis Abeba by 2005/2006. If thelicensee fails to achieve the rollouttarget for the Internet, it must payETA a penalty of Birr 300 for eachmissed subscription in each year.Similarly, there are penalties for notmeeting service level requirements.

Aside from a privacy policy forbiddingdisclosure of user details, EthioNet hasalso had an Acceptable Use Policy(AUP) from its inception, whichincludes the stipulation thatanonymous transmissions areprohibited and that accounts are non-transferable or cannot be shared withthird parties outside the sameorganization. This latter condition wasconsiderably abused during the periodin which no new accounts were beingaccepted, because the Global Onetechnical implementation did not barsimultaneous use. Thus the sameaccount was resold many times bysome users.

3.4 Universal access

A study by the ETA of universal serviceneeds and goals is currently underway. Much of the ETC’s currentstrategy, as directed by government,is informed by traditional universalservice objectives - i.e. to roll outvoice services to every district(Warada) and ultimately to thesmallest administrative unit, theKebele (farmers’ association). Basicvoice services are seen as the primaryconcern to be addressed, rather thanto use scarce resources for morelimited demand for advanced services.This is also seen as a reason forensuring that ETC retains a monopolyin all services so that the funds forrolling out services in rural areas are

not syphoned off by foreign, cream-skimming competitors focusing on themore lucrative urban areas.

Currently, the only official governmentactivity to promote public access tothe Internet is the ETC cybercaféslocated in downtown Addis Abeba.More recently, the British Council hasobtained permission to operate acybercafé, as part of its library, on itspremises in the city. The BritishCouncil has also assisted in theestablishment of a multi-purposecommunity telecentre in Wolisso, atown 116 km from Addis Abeba,through a joint project with the ESTCand with funding from the BritishEmbassy. The telecentre providescommunities in Wolisso with Internetbrowsing and e-mail services includingother communication facilities such asfax and telephone. As part of the sameproject, there is a plan to set upanother two telecentres at DebreBerhan and in Tigray. More recently,the Agence de la Francophonie (OIF)has begun plans to open a cybercaféswith 12 PCs in Addis Abeba which willoffer access to French online materialsfor free.

Private cybercafés have so far beendiscouraged because of theircontravention of the currenttelecommunication policy. This isexacerbated by ETC’s concern thatthese are providing VoIP services anda number have been shut down.Nevertheless, there are dozens ofcybercafés in Addis Abeba unofficiallyproviding Internet browsing and e-mailservices, including in major hotels andorganizations such as the Hilton, andthe Chamber of Commerce. Many ofthem offer a wide range of businessservices such as photocopying, printing,fax delivery, stationary and IT products.

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Figure 8: Cybercafés in Addis Abeba



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4. Information and communication technologies and the nation

Ethiopia has yet to promulgate anysubstantive high-level national ICTpolicies, although a NationalInformation Policy is now beingdeveloped. In June 2001, the BritishCouncil hosted a conference on ICTsand development entitled “Ethiopia inthe Knowledge Age”, which broughttogether 350 key policy-makers ingovernment, development agencies,academics, NGOs and the privatesector. The event was supported bythe Commonwealth Telecommuni-cation Organization’s Building DigitalOpportunities programme and avariety of local institutions. Theparticipants undertook a thoroughreview of the issues and a series ofimportant recommendationsemanated from the conference,including the need for a national ICTtask force and this particular jointCTO/ITU case study. Further detailsof the recommendations can be foundon the conference website.1

4.1 Education

With low levels of literacy and thelimited number of school leavers(1999 rates of primary schoolenrollment are half the Sub-Saharanaverage), improving the educationalsystem is a high priority forGovernment. In particular, thestandard of English languageinstruction is low - there are 25 officiallanguages of instruction (with threedifferent scripts), which makes the useof ICTs problematic for many, as thesescripts are not supported by standardsoftware.

The basic education system has so farbeen virtually untouched by theInternet. Of the 12’000 primaryschools, only 9 had Internet accessat the end of 2001. Perhaps moresurprisingly, only 10 of the424 secondary schools had access.The Department of Education is in theprocess of undertaking the massive

task of upgrading the skills of its120’000 primary school teachers and14’000 secondary teachers and is thusconcentrating on various teachertraining and capacity buildinginitiatives. In early 2002, theDepartment of Education awarded aBirr 2.1 million tender to four localcomputer suppliers for the provisionof 170 workstation computers,4 servers, 9 laptops and relatedequipment under its Basic EducationSystem Overhaul (BESO) project. Theequipment, which is funded by USAIDto support capacity building in teachertraining and reforms of the primaryeducation system, will be installed atthe Teachers Training Institute (TTI)and the Teachers Training College(TTC). The Department is alsoplanning to introduce ICT training insecondary schools.

The UNDP is planning a project to link400 of the high schools to the Internetin a USD 6 million proposal. Discussionabout the use of VSAT for the projecthave not borne fruit yet and it isexpected that the project will startwith the 30 per cent of the schoolsthat have phone lines. The intentionwas to provide community accessfacilities to offset the operating costsfor the schools, but this is currentlyconstrained by the Telecommuni-cations Act restrictions on resale ofservices. UNDP is also currentlyproviding ICT capacity building for theMinistry of Education, to establish aLAN and WAN at the ministryheadquarters and to carry outtraining.

The tertiary education systemcomprises 6 national universities and3 polytechnics with a total ofapproximately 86’000 students, ofwhich there were 113 IT graduates in2001. Addis Abeba University (AAU)is the largest tertiary institution andis also host to one of the World Bank’sAfrican Virtual University (AVU)2

27


facilities which has proved popularamong students who have shownwillingness to pay up to USD 200 percourse for access to the one-wayvideo-conferencing service, which hasan audio return-path for speaking tothe lecturers. A variety ofprogramming, computer literacy andcomputer hardware maintenancecourses are taught via the facility.Connectivity is provided by VSAT andis one of the only telecom linksoperating independently of the ETC.Currently, AVU Ethiopia is hoping towin a bid for course contentdevelopment for all of the AVU unitsin Africa. The AAU provides a degreeand diploma programme in computerscience and has changed its formerdepartment of Library Science to anInformation Systems degree program.There are also a variety of private ITtraining colleges, of which Micro Link,CPU colleges, Ethilink and HelcoE areamong the most well known.

The Ethiopian Science and TechnologyCommission (ESTC), which is hostedby AAU, provides support for ICTs andnetworking in the academic andresearch sectors via its NationalComputer and Information Centre.While the ESTC has sensitized mostof the academic and researchinstitutions (including those outsidethe capital) to be aware of thepotential of electroniccommunications, the lack of availablefunds has been major limitation onusage when combined with the highcost of access to ETC’s Internetservice. To address this, ESTC has hada plan since mid-1996 to establish afull Internet hub—called AAUNet—onthe Addis Abeba University campuswhich would form the nucleus of aphased expansion toward a nationalacademic and research networklinking the 6 universities and 18national research centres.

A British NGO, Ethiopia Aid, hasalready installed a USD 1.2 millionfibre optic backbone linking the 5 AAUcampuses (the Black Lion Hospital, theMedical Faculty and the Veterinaryschool 40 kms away will be linked inthe second phase). However, EthioNethas not been keen to supply the

Internet link because the othertertiary academic facil it ies areindependent entities and this wouldimply resale of EthioNet’s service byAAU. EthioNet has been unwilling tohand over the .edu.et domain to theUniversity of Addis Abeba as it believesthe domain should not be controlledby an interested party, but should beadministered by an independentagency.

ESTC also has a number of other ICT-related programmes:

• To deliver education to workersvia extension programmes andevening study, once ESTC’sexisting computer lab isexpanded.

• To upgrade the skills of teachersin service during summerholidays. There is currently aprint-based programme, butESTC would like to use the TVnetwork and the Internet todeliver distance education.Negotiations have taken placewith the Educational MediaAgency to produce interactivedistance education materials, butthe fees quoted for production ofUSD 1.2 million were deemedexcessive, so ESTC is planning toset up its own multimedia lab atthe University.

• To collaborate with ETC’s distanceeducation labs based around thecountry.

The School for Information Studies inAfrica is also based at the Universityof Addis Abeba. It has established aresearch programme on AfricanInformation Society issues, and is alsothe national centre for the support ofthe UNESCO developed full-textdatabase system, CDS/ISIS.3

The Institute of Ethiopian Studies isbeing assisted by the Faculty of Afro-American Studies (FAS) at HarvardUniversity to establish the EthiopianArt and Architecture Database Project.The Project plans to build acomprehensive photographic archiveand database of Ethiopian art and

28


architecture. Developed inconsultation with the EthiopianChurch, the Ministry of Culture, andother relevant authorities FAS isseeking to raise USD 1.3 million tocover the initial three-year phase.

4.2 Health

Health care is very underdeveloped inEthiopia, which has one of the lowesthealth status indicators in the world.According to a report by thetelemedicine working group, infantmortality is 105/1000, maternalmortality rates are between 560 and850/100’000 and life expectancy isestimated to be between 47 and 54years. Health services are onlyaccessible to about 50 per cent of thepopulation (due to bad or nonexistentroads it can take up to two weeks forsomeone to travel to the capital froma remote area) and most of themedical experts are concentrated inthe major cities.4

The establishment of the HealthNetnode in the early 1990s provided aninitial impetus to the use of theInternet in the health sector, howeverbecause of the limited bandwidth andrestriction of service to e-mail, this didnot have widespread impact. Thereare a total of 110 hospitals in Ethiopia,of which only 38 had a dial-up Internetconnection by end 2001 and nohospitals were using the Web foradministrative purposes. Of the311 pharmacies in the country, 8 hadInternet access and none of the4’818 health service clinics appear tobe online.

A National Telemedicine Co-ordinatingCommittee has been set up as part ofthe ITU’s telemedicine project inEthiopia to support the developmentof a national telemedicine network,which aims to initially connect10 outlying hospitals and the AAUFaculty of Medicine. Telemedicineequipment to facil itate remotediagnostics is to be installed at eachhospital. ITU is planning to providetelemedicine software and digitalcameras to each hospital, along witha central telemedicine workstation tothe Faculty of Medicine. ETC has been

supporting the project with thedevelopment of a design for thenetwork, upgrading of telecom linkswhere necessary and making 50 freehours per month of dial-up Internetaccess available to the hospitalsinvolved in the project. The projectwas planned to begin in December2000, however due to executivepersonnel changes in the healthministry, which have delayed finalapproval for the project, the initiativehas not yet started.

4.3 E-commerce and trade

E-commerce and the use of theInternet in trade is at a very earlystage of development in Ethiopia.E-commerce related laws andregulations such as privacy protectionand digital signature have yet to beadopted, however, the draftInformation Policy currently underconsideration is expected to outlinesteps in this direction. There are nocredit cards available in the country,or branches of any internationalcommercial banks, which even makesit impossible for foreign visitors toobtain a credit card cash advance.5

Automatic Teller Machines (ATMs) arealso currently not widely in use,although the major state owned bank- the Commercial Bank of Ethiopia isabout to run an 8 ATM pilot usingAmharic customization. The Bankinitially planned to introduce a creditcard, then decided instead to developa smart card service. Initial bids forthe supply of the smart card wererejected due to lack of EMVcompliance and a re-tender isexpected next year.

The Commercial Bank, as well as theprivately-owned Dashen Bank, havealso begun networking their branchesin Addis Abeba and plan to extend thisto the region with the new DDNnetwork in the coming months.Currently, the banks must useinternational direct dial to participatein SWIFT, CitiBank and Western Unionfinancial transfers, and this isbecoming a significant problem, aswell as being costly. In other countriesthe airlines nework - SITA - is used,and although a SITA PoP exists in

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Addis Abeba for use by the airlines,other agencies are not allowed toaccess it.

The Ethiopian Trade Point wasestablished in October 1997 withassistance from UNCTAD to collect anddisseminate trade information usingICTs to facil itate foreign tradeprocedures and to implement anelectronic trading system, but becauseof the limitations described above, thishas made little progress.6 Similarly,these and other factors such as thewar with Eritrea have contributed tothe very limited amount of tourism inEthiopia (particularly in view of thecountry’s potential to attract tourists)and although there are some websitespromoting tourism, these are smallstandalone sites created by privateoperators of tours and accommo-dation.7

Despite the barriers to e-commerce,one or two companies have adoptedsome innovative techniques to exploitthe potential of the Internet for e-commerce.8 The most well known ofthese is EthioLink’s ‘reverse e-commerce’ service (EthioGift), whichallows the Ethiopian Diaspora (manyof which do have credit cards) topurchase items, including goats, fordelivery to their friends and relativesliving in Ethiopia.9

4.4 Government

In 2001 there were estimated to beabout 349’650 civil servants in theEthiopian Government, of which only20 per cent have post-high schooleducation. About 50’000 (14 per cent)had PCs and an estimated 2’200 hade-mail (based on 735 governmentEthioNet accounts each having3 users).

Through the European UnionDelegation, the InternationalParliamentary Union (IPU) has madeconsiderable funds available to theEthiopian Federal Parliament and theFederation Council for a project calledDevelopment and Upgrading of theParliamentary Information System(DUPIS). The Birr 8.24 million contracthas yet to be finalized following

controversy over the award of thetender.

The Ethiopian Civil Service College hasrecently been supported by the WorldBank’s Global Development LearningNetwork (GDLN) to establish asophisticated VSAT-based peer-to-peer videoconferencing and distancelearning centre at its premises on theoutskirts of Addis Abeba. The CivilService College was set up in 1995 toprovide training for civil servants,however the GDLN facility (which ispart of a network of 29 centres aroundthe world, including 6 others in Africa)is open to anyone. The two-wayvideoconferencing facility is housed ina classroom capable of taking up to40 students and a variety of courseshave been held for about1’200 students so far, for which theypay about 25 per cent of their salary.The centre also houses 8 PCs on anetwork with a direct VSAT link to theInternet. The College operates withoutstrongly promoting its capacity to thepublic or enhancing its services (forexample by allowing students toconnect directly from home instead ofonly from the university), because theCollege managers are somewhatunsure of their status with regard toETC’s monopoly on services.

4.5 NGOs and internationalorganizations

The British Council and the ChristianRelief and Development Association(CRDA) have recently establishedDEVINET to support the developmentof civil society through collating andpublishing information on a websitegenerated by NGOs and otherdevelopment organizations inEthiopia. DEVINET also aims tosupport NGOs in developing their ownwebsites and to improve their use ofInternet resources.10

The UN Economic Commission forAfrica (UNECA) in Addis Abeba is thelocation of the headquarters of thisorganization, which has longsupported electronic networking in theregion through its Pan AfricanDocumentation and InformationService (PADIS) which has now been


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subsumed under the newDepartment of Information Servicesand Documentation (DISD). DISD isnow spearheading the Afr icanInformation Society Init iat ive(AISI).11 In the mid-1990s, PADISmanaged a variety of developmentdatabases, a store and forwardelectronic mail host as part of the

CABECA project. Last year, CISCO,the Internet equipmentmanufacturer, has worked with UNECAto establish a Network TrainingAcademy which has already seen itsfirst set of graduates. UNECA has aleased line to ETC as well as its own1Mbps VSAT Internet connectiondirectly linking it with New York.12

1See: http://www.ethiopiaknowledge.org/.

2See: http://www.avu.org/.

3Contact: [email protected].

4Telemedicine in Ethiopia. ITU Project document prepared by Dr Leonid Androuchko.

5Dashen Bank claims to provide this service to visitors at its Sheraton branch, but the service appears to onlybe available to Sheraton residents for settling bills and Dashen must send the credit card slips out of thecountry to deposit them, as does the other international hotel - the Hilton.

6Melaku Legesse [email protected].

7A general tourism website was developed by a UNECA staffer at http://www.tourethio.com.

8A coffee promotion website is at www.cofeemocha.com.

9See: http://www.ethiolink.com/EthioGift - this example is often quoted by the president of the president ofthe World Bank in his presentations to underline innovative techniques for using the Internet.

10See: www.devinet.org, or [email protected].

11See: http://www.bellanet.org/partners/aisi.

12See: http://www.uneca.org.

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5. Conclusions and recommendations


5.1 State of the Internet inEthiopia

The Mosaic Group has developed aframework for characterizing the stateof the Internet in a nation. Theyconsider six dimensions, each of whichhas five ordinal values, ranging fromzero (non-existent) to 4 (highlydeveloped).

The dimensions are as follow:

• Pervasiveness: a measure basedon users per capita and thedegree to which non-techniciansare using the Internet.

• Geographic dispersion: ameasure of the concentration ofthe Internet within a nation, fromnone or a single city tonationwide availability.

• Sectoral absorption: a measureof the degree of utilization of theInternet in the education,commercial, health care andpublic sectors.

• Connectivity infrastructure: ameasure based on internationaland intranational backbonebandwidth, exchange points, andlast mile access methods.

• Organizational infrastructure: ameasure based on the state ofthe ISP industry and marketconditions.

• Sophistication of use: a measurecharacterizing usage fromconventional to highlysophisticated and drivinginnovation.

Ethiopian values for these parametersare shown below (for the methodologysee Annex 1).

5.1.1 PervasivenessPervasiveness in Ethiopia is rated at1, experimental. Even assuming anoptimistic estimate of 60’000 Internetusers out of a population of almost55 mill ion, the user rate is ofonly 0.092 per cent. The user

Figure 9: State of the Internet in Ethiopia

Dimension Value

Pervasiveness 1

Geographic Dispersion 1.5

Sectoral Absorption 0.5

Connectivity Infrastructure 1

Organizational Infrastructure 1

Sophistication of Use 1

TOTAL 6

Source: ITU adapted from Mosaic Group methodology. Online at http://som.csudh.edu/fac/lpress/gdiff/quest.htm.

0

1

2

3

4Pervasiveness

Geographic dispersion

Sectoral absorption

Connectivityinfrastructure

O rganizationalinfrastructure

Sophistication of use

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community does not only includenetwork technicians, but it is alsoextended to a limited number ofstudents, civil servants and privatecompany users are, however, mainlyconcentrated in Addis Abeba, withonly 6 per cent of users locatedoutside the capital.

5.1.2 Geographic dispersion

Geographic dispersion is rated at 1.5,between single location andmoderately dispersed. There are8 towns outside the capital city withPoPs, and Internet access is availablenationwide at the local call tariff.However, the small number oftelephone lines and computers,particularly outside the capital, is aserious barrier to Internet diffusion.

5.1.3 Sectoral absorption

Sector absorption is rated at level 0.5,rare. The ranking is a function of thelevel of connectivity in government,education, health care and business.Ethiopian universities have Internetaccess, although the number ofaccounts is very limited, and there areno leased line connections. Primaryand secondary schools are virtuallyuntouched by the Internet, with only9 out of 12’000 primary schools and10 out of 424 high schools havingaccess. A few governmentdepartments have rather simplewebsites and the usage by privatecompanies is minimal. There wereonly 38 hospitals out of 110 with dial-up Internet connection in 2001, andInternet use is usually restricted toe-mails.

5.1.4 Connectivityinfrastructure

Connectivity infrastructure is atlevel 1, thin. International Internetconnectivity is 4 Mbit/s outgoing and10Mbps incoming. There is nonational Internet backbone, nordomestic Internet exchange point(actually not necessary with only oneISP). There are only about 10 Internetleased lines currently in place andbroadband Internet access is notavailable.

5.1.5 Organizationalinfrastructure

The organizational infrastructure is atlevel 1, single. The EthiopianTelecommunication Corporation is thesole Internet service provider, it isowned by the Government and has thecomplete monopoly on the Internetservice provision market.

5.1.6 Sophistication of use

Sophistication of use is at level 1,minimal. Internet is used by a smallpart of the population, mainly forconventional applications, such as e-mail and web search. There are a fewwebsites in the local language, andthe development of new applicationsis not planned for the moment.

5.2 Sector liberalizationstrategy for Government

Aside from very low levels of economicdevelopment in Ethiopia, the diffusionof the Internet has also beenconstrained by the legal monopoly ofETC in all telecom-related services,along with the lack of policy clarityover the provisioning of value-addedservices such as web design, sitehosting or cybercafés. The recentinstitution of a regulatory authorityand the plan to study the partialprivatization of ETC are importantsteps towards an open market, andwill help the development oftelecommunication-based services inEthiopia. However the need for ETCto retain its monopoly in servicesshould be carefully examined by thecountry’s policy-makers.

The justification for continuing thesemonopolies is usually to ensure thatsufficient income is generated to rollout infrastructure without it beingsyphoned off by competitors. Althoughthis strategy may be logical,experience since the FCC’s breakup ofAT&T, has shown that the only way ofensuring efficiency of service deliveryis to bring self-interest into play byopening the markets and usingcompetition to do much of theregulating. This strategy also helpsaddress the limited resources of all

33


government policy-makers andregulators worldwide (even the FCC),who do not have the capacity to keepup with the rapid technological changein order to fully enforce regulations.

Furthermore, a large and powerfulregulatory apparatus is not asnecessary in a country like Ethiopiaas it is in some developed countries,for the reason that less developedcountries do not generally have hugepublic incumbent telecommunicationoperators that need to be transferredinto a competitive environment.Rather, new operators entering acompetitive environment without amassive incumbent, should normallybe able to self-regulate to a muchgreater extent.

Another major difference betweendeveloped, and developing, countrymonopolies is that developingcountries are not encumbered with oldtechnologies which are already beingused by the majority of thepopulation. Instead, new companiescan make use of next-generationtechnologies which are usuallycheaper, allowing much smallercompanies to enter the marketplace.Today, even partial self-provisioningcan occur - as demonstrated by therapid growth of the Internet, WiFi andmobile telephony, this is nowbecoming a model that can be usedmore widely in the telecom sector.

In practical terms, while competitionin the telecom sector may indeedresult in some overlap and duplicationof resources by the differentcompetitors, the overall operation ofthe sector is more efficient than asingle monopoly.

Thus, any initial privatization andliberalization of the telecom sector inthis day and age should not simply beto shift a public monopoly to a privateone, which can become even moredifficult to control, especially if it hasa large foreign partner to back it up.The record of foreign participation inAfrica has generally shown that eventhe strategy of a limited exclusivityperiod (usually 5 years) for basicservices in urban areas is nowadays

in question, and it may ultimately bemore efficient to transition directlyfrom a public monopoly to a multi-player competitive environment, withsmall areas of exclusivity (perhapsdown to the Warada level) for rurallocations.

In preparation for this, theGovernment might look to develop atransitionary strategy that does notdirectly affect the monopoly in ETC’score business (voice provision andwholesaling of the national backbone),as well as laying the groundwork forthe next phase of competition. Animmediate transitionary step would beto amend the telecommunication lawto allow for resale of ETC’s services.Examples are needed to show thatliberalization could have beneficialeffects on the market, and to bringimprovements to the customers andto ETC. The licensing of new mobileoperators, ISPs, cybercafés and callcentres would all help provide thisimpetus and take the burden off ETCin providing the wide range of value-added services that are needed.

This will also help ETC to begin shiftingits operational culture into acompetitive mode, bring additionaltraffic to ETC, and more generally helpto ‘decentralize’ telecommunicationservices, separating wholesale fromretail operations, and leaving part ofthe marketing and customer-careactivities to private companiesoperating in different zones andregions. The expected results of thisin demonstrating that competitiveforces will ensure cost-based pricingand higher service levels without theneed for strong regulation would alsohelp to address any concerns that anopen market will fail to deliver qualityand affordable services.

One of the major diff icultiesexperienced by the regulatoryauthority, ETA, is its lack of financialautonomy, increasing its dependencyon government for decision-making,and low salary levels, making itdifficult to attract and retain skilledstaff. By giving the opportunity tomany small private companies toapply for licences to resell services,

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ETA could provide itself with newsources of revenue, enabling it to payhigher salaries that would allow it toretain skilled staff and to increase itsparticipating in international initiativesfor regulators.

Given the urgent need to improveservice delivery for the majority of thepopulation, new strategies need to bedeveloped rapidly by policy-makersand Government, with a view tosetting a deadline for the opening upof the market and the timelyannouncement of this date.

5.3 National strategies andpolicies to increaseInternet diffusion

There is clearly a growing politicalmomentum for improving the use ofICTs in Ethiopia, however this islargely focused on the provision ofvoice facilities in rural areas. Fiveyears after the BITE report, a nationalinformation policy has yet to befinalized and awareness of theimportance of improving theaccessibility and use of the Internetis still at a low level. While anunderstanding of the importance ofICTs is growing amongst the generalpopulation, this awareness needs tobe raised to the highest political levels.

Experience around the world hasshown that the rapid diffusion of ICTsin a country is often closely associatedwith the level of government support.In the case of Ethiopia, the expansionof Internet infrastructure and servicescould be significantly accelerated bymeans of a national programmesupported at the highest level ofgovernment. For instance, a nationaltask force could be established tosupport ICTs, headed by the PrimeMinister and composed of nationalexperts. Such a task force could serveas the focal point for the high-levelcoordination of a number of nationalinitiatives.

Seminars intended for policy-makersand regulators might also be a usefulmethod to provide hands-onexperience of the benefits of a high-quality Internet connection with

appropriate applications andinformation resources. Moreimmediately, it has also beensuggested that case studies such asthe present one should be translatedinto Amharic to facilitate circulationamong policy-makers and publicationin the press. Also, leading NGOs, thePrime Minister’s Office and specificministries with strong role ingovernment (such as the Ministry ofCapacity Building and the Ministry ofInformation) might be targeted withinformation and recommendationssuch as those mentioned in this casestudy.

Certainly, development andinternational bodies could usefullyfurther help to promote Governmentawareness of how the Internet andICTs can support of nationaldevelopment, encouraging it to makeInternet diffusion a top item on thepolicy agenda. In this respect, theGovernment has a crucial role to playin order to create a critical mass ofusers, local entrepreneurs and skilledICT technicians.

As indicated above, the policiesconcerning the liberalization of theEthiopian telecommunication industrywill have the most profound impactson the prospects for broadeningaccess to the Internet and to ICTs ingeneral. In a competitive market thereare likely to be a variety of innovativenew ideas and opportunities forproviding affordable Internet servicesand value-added services in Ethiopia,as well as encouraging localbusinesses to exploit the much largerinformation economies of thedeveloped countries (as the casestudy has shown, a few enterprisingbusinesses are already beginning todo this). Some of the possible newmarket arrangements that could occurin a liberalized environment include:

• Universal service/accessobligations for licence applicants,including broadband connectionof public access points (e.g.telecentres, schools, libraries,etc.) to high capacity networksand services;

35

• Joint ventures betweencybercafés/telecentres, thefixed and mobile line operators,and other investors such as e-commerce entrepreneurs tooffer full-service ICT access,content, and business ventureoptions to rural communities, aswel l as to ‘ te lework’ fordeveloped countries;

• Specialized start-up companies,such as publ ic payphoneproviders, ISPs, etc,establ ishing new points ofaccess, with ETA s support (andin some cases subsidy);

• Opportunities to link these withrural community radio licences,such as through UNESCOsCommunity Mult ipurposeCentre (CMC) programme.

ETA s liberalization policy could bestructured to encourage these kindsof activities, tapping the potential ofthe under-served markets of Ethiopiato create the incentives for thosewith ingenuity and vision to bringboth economic development andgreater social equality to Ethiopians.

Aside from liberalizing the sector thiswill primarily require governmentinvestment in education and training,along with taking measures to cutinput costs and consumer prices bysupporting the development of localcapital markets and other forms offinance, reducing import duties andspeeding business registration,l icensing and import clearanceprocedures.

While the kinds of activity mentionedabove are necessary, policies alsoneed to be developed that facilitatethe increased use of the Internet invarious sectors, such as education,health, e-commerce, etc. (seebelow).

A framework for the per iodicmeasurement and evaluation ofprogress could also be developed inassociation with these initiatives.

5.4 Ensuring low Internetaccess tariffs

The low local call tariff in Ethiopiacould do much to help promote theuse of the Internet but its benefitshave been obscured by the highsubscription charges for EthioNet,which are amongst the highest inAfrica. These are expected to berevised downwards, but this is unlikelyto be a sufficiently large reduction tobe affordable to a significant numberof Ethiopians.

There are a number of other strategiesthat could be considered to lowerInternet access prices. One is to createa business model in which ISPs andthe telecom operator share the localtelephone usage charge and eliminatethe ISP charge. This also simplifiesbilling. A related strategy would be toinvestigate a very low flat-rate or evena free option for Internet access as isthe practice in Peru and Chile. Clearly,if the ISP sector is liberalized, thenISP licence fees will need to be low inorder to encourage small startupcompanies to enter the market andto avoid the high fees simply beingpassed on to the consumer in the formof higher usage charges.

Prices for leased-line Internet accessalso need review. Use of the Internetand e-mail has increased the demandby many businesses customers forpermanent circuits. The availability,quality, and especially price of thesedata services, has a direct impact onan increasing number of regularcustomers, as opposed to the fewlarge corporations that traditionallyhad large budgets for the use ofprivate-line and data services.

In addition, if the ISP sector is to beopened up, they must be ablepurchase high capacity links betweentheir PoPs and in effect resell leasedlines provided by the telecom operatorto their customers. The price that ispaid for these data circuits will directlyaffect the price that end users mustpay for Internet services. This fact,and the general importance of data


36


communication in today’s interna-tional economy, underscores theimportance of competitive pricing forprivate-line and data services.

Consideration also needs to be givento allowing ISPs and customers to self-provision their Internet infrastructure(as is becoming increasingly popularin other African countries), fullliberalization of KU-band VSAT andwireless for data in the 2.4GHz and5GHz wavebands. This will greatlyencourage investment by governmentand development assistance partnersin linking public institutions to theInternet and ultimately build muchgreater demand for broadband andtrunking infrastructure from thetelecom operator. This would not affectETC’s primary revenue base of voicecalls and trunking. However,frequency monitoring equipmentshould be obtained to ensure that linksadhere to power standards and tomonitor congestion.

5.5 Universalizing access

The majority of Ethiopians are unlikelyto be able to afford a telephone line,individual Internet access or apersonal computer to access theInternet. Although there are a somecybercafés in the country, theyoperate in a grey area, are located inthe largest cities and are relativelyexpensive. Clarifying current policyand liberalizing the sector will likelyresult in a reduction of prices and anexplosion of facilities offered by theprivate sector, as evidenced in manyother African countries. To ensure thatthese facilities also reach publicinstitutions and the rural areas, apolicy promoting shared Internetaccess from public locations shouldalso be developed. This would alsohave the benefit of providing userswith facilities to access training ofmany types.

As a first step towards promotingshared access in rural areas and inthe public sector, service providerscould be required to provide servicesat cost for community access pointssuch as schools and libraries. Anotheroption would be to establish a

universal service fund, using a smallpercentage of the licensed operators’turnover (or tax contributions) to fundunprofitable services in rural areas. Inaddition, it could be possible toencourage organizations with a largenetwork of public offices such as banksor the post office to work together toprovide Internet access.

5.6 Sectoral supportstrategies

5.6.1 E-commerce

With the global moves toward the useof e-commerce it is important thatEthiopia develop adequatee-commerce enabling policies whichare synchronized with global trendsand standards. Governmentleadership is needed to impart the useof e-commerce with authority,confidence and awareness. Inparticular it should:

• Accelerate the development of e-commerce relevant legislation. Inparticular, digital signatures andcontracts, intellectual property,taxation, encryption, privacy,network security and computercrime, liability, and consumerprotection;

• Support government-to-businessprojects such as electronicpayment of taxes, customsduties, public procurement, etc.;

• Develop government-to-consumer applications such as inagricultural trading markets thatare relevant to a significant partof Ethiopian society;

• Legitimize and consolidate thebusiness and trade directoriesthat currently exist for thecountry.

Coordination is needed to unify e-commerce initiatives taking placenationwide through establishment ofa task force comprising government,development agencies, the privatesector and civil society.

Awareness raising and education isneeded for the public and the business

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community of the potential ofe-commerce and ICTs in general. Thediffusion of successful e-businessmodels, development of pilot projects,and a toolkit on how to set up an e-business will help to improve theprospects for e-commercedevelopment in the country.

Support for electronic transactions ingeneral needs to be urgentlyaccelerated in Ethiopia before thebenefits of e-commerce can be seen.This could be in through theintroduction of GSM transactions,credit cards and prepaid/smart cards.This would include making thenecessary legislative and institutionalreforms to enable credit cardpayments over websites and could bedeveloped through an alliance ofprivate and public sector interests theuse of e-commerce prepaid cards (aconcept similar to the successfulmodel used in cellular mobileservices).

Small-scale services and products canoften more adequately meet localneeds, but are unable to attract capitalbecause of the small sums required.Given the scarcity of venture capitalavailable in Ethiopia for local small andmedium size enterprises (SME) withe-commerce initiatives, theGovernment and local financialinstitutions should consider thepossibility of establishing a fund forspecific e-commerce initiatives.

Inefficient shipping/clearing anddelivery of goods will undermine thecompetitiveness of many e-commerceinitiatives (as it does for normalbusinesses). Given it is a landlockedterritory with a very undevelopedtransport infrastructure, Ethiopiaprobably suffers more than manyother low-income nations from thetransport barrier. One action toimprove the situation could be topromote cooperation among e-commerce companies to achieveeconomies of scale in the delivery oftheir products. Furthermore, it isimportant to seek lower costs andincreased efficiency among customsclearance, shipping and transportcompanies.

Local content development couldbenefit from support, through specialtax and credit incentives for thedevelopment of local websites ineconomic sectors in which Ethiopiahas competitive advantages, such asagriculture, tourism, etc. Theproduction of local content and anational e-commerce sector could beenhanced by establishing incubatorsin different geographical areas withthe adequate conditions and with thecooperation of research anddevelopment units of private sector,universities, and public institutions.

5.6.2 E-government

Government should lead by examplethrough its use of ICTs to carry out itspublic service functions. Governmentas an active ICT user wouldsimultaneously increase its ownefficiency and demonstrate the gainsthat can be realized through newinformation and communicationtechnology.

An e-government initiative couldinclude establishing a well-developedgovernment site. This would build onexisting sites developed by variousministries by providing appropriatelinks and more consistency. The‘electronic parliament’ project couldalso be part of this programme.

Some other areas in which theEthiopian Government can pursue thisleadership function are through:

a) The establishment of atransparent electronic procu-rement system available to allinterested parties on theInternet;

b) The deployment of intranets andnetworked team practices aimingat the assimilation of modernwork practices typical ofnetworked learning organiza-tions;

c) The use of the Internet in publicservices that depend heavily oninformation for policy makingsuch as employment, transporta-tion, and energy.


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5.6.3 E-education

Education is a critical component forsuccessful Internet adaptation anduse. Ethiopia might want to considersome of the following strategies toenhance the performance of thecountry’s education sector, andprepare its population for using theInternet:

a) Experience around the worldhas shown that progress in thearea of ICTs will be limited ifteachers are unaware of, orreluctant to accept, informationtechnology as an educationaltool. In Ethiopia, there is not yeta national programme to trainteachers in the use of ICTs foreducation. Public and privateinstitutions could establish anat ional programme tofamil iar ize teachers at a l leducational levels with basicknowledge about the use andpotential of ICTs.

b) Distance education has greatpotential for countries withlimited resources and significantrural areas such as Ethiopia.There is a need to providefurther support to projects likeAAUnet, ESTC’s distanceeducation programmes andother national initiatives aimedat bui lding knowledge andexperience in the provision ofeducation over the Internet.

c) Given the central role thattechnology plays in thegeneration of wealth today, ICTtraining and applications shouldultimately be integrated intoevery stage of the educationalprocess, at the levels of primaryand secondary school, highereducat ion, and vocat ionaltraining, and become part of thenational curriculum. While theprovis ion of more basicresources for the educationalsystem will need to take placefirst in a country like Ethiopia,the establishment of sharedaccess centres for surroundingschools could be consideredbefore al locat ing scarce

resources to connecting themdirectly to the Internet. Theemergence of low cost WiFi andKU-band VSAT (USD 2’000 perterminal) for Internet access nowmakes providing connections inrural areas a more affordablepossibility and strategies tocapitalize on this should bedeveloped. In addition, theplanned introduction of GPRS onthe GSM service could aid in theprovision of access for mobileusers and others in remotecommunities covered by thesignal, provided that tariffsremain low for this service.

d) The cost of communicationservices is high for most schooland university budgets. There isno formal requirement to providelow-cost communication accessfor the educational sector. TheGovernment might usefullyintroduce mechanisms topromote the delivery ofcommunication services at lowcost to educational institutionsnationwide. These could includespecial tax consideration for theoperators, direct subsidies toschools in the startup period, andother schemes such as adopt-a-school programmes that could bepromoted among internationalorganizations and the Ethiopiandiaspora.

e) Government, local pr ivatesector, and civil societyorganizations could seek thesupport of the internationalbusiness community to fundprogrammes to providetechnology tools (such as newand recycled computers,software applications, books andother instructional materials, etc)and state-of-the-art knowledgeon technologies and applications.

f) Instilling a culture of informationsharing should be an overarchingpart of many of these initiativesto address what many call the“highland culture” which is ratherclosed and not conducive to openinformation exchange.

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5.6.4 E-health

The health sector in Ethiopia as inmost other parts of the world lagsbehind other sectors in the country inadopting ICTs. Much of this slow paceis associated with a lack of awarenessamong the medical community of thecost/benefit that underlies theadoption of new technologies like theInternet. An existing proposedtelemedicine project supported by ETCand ITU has not yet got off the ground,but measures such as this will clearlyhelp to approve the awareness in thissector. This delay should beaddressed, and other measures thatcould be considered include:

a) Develop an awareness campaignto highlight with precise data tothe health sector, the cost andbenefit relation if technologieslike the Internet are adopted.

b) Support an annual conference ontelemedicine in Ethiopia whereexperiences are presented andopportunities offered by newcommunication technologies arediscussed.

c) Identify, at the internationallevel, the institutions that arecurrently providing support(through soft, long-term loans,and philanthropic projects) forthe advancement of e-health andtelemedicine in developingnations and solicit their supportfor the implementation of specificpilot projects in the country.

d) Incorporate health-relatedfunctions, applications, and linksto the Internet-connectedtelecentres that are being createdthroughout the country. Promotesuch opportunities among the localhealth community.

5.7 General operationalstrategies for ETC and ETA

On a financial basis, ETC only payscorporate tax to the Government butis still limited in its ability to increaseexpenditures on infrastructure

deployment because it operateslargely on the basis of cash-flow fromrevenue generation. ETC has notexploited the local (or international)capital markets for loans, which couldbe a ready source of finance forincreasing the pace of rollout of thenetwork. Fortunately access to hardcurrency appears not to be a problem,as it is in many other African countries.

Adopting regional type-approval oftelecom equipment would reducedelays in adoption of new technologiesand decrease the demands on limitedresources within ETA.

To provide temporary access forvisitors to Ethiopia and for EthioNetcustomers travelling abroad it issuggested that ETC consider joiningone of the two major roaming serviceproviders, IPASS (www.ipass.com) orGRIC (www.gric.com). These servicesoperate by using the Radius protocolsto authenticate users remotely andcharging a small additional fee(usually about USD 6 per hour) whichis billed back to the user’s homesystem, allowing the providers of theroaming service to earn extra incomefrom roving users. As there are manytemporary diplomatic andinternational agency users visitingEthiopia, EthioNet should be able toderive significant income from theservice.

A web-based version of the publictelephone directory should be requiredby the Telecom operator’s licence andrequested to ETC for the 2002 update.

5.8 Other observations

The extremely low tariff of the mobileservice (up to 5 times lower thanmany other African GSM providers)would be worth further study andpromotion as a case study. Theadvantages of not having to pay a highlicence fee and excessive interconnectcharges is clearly benefiting theconsumer considerably, but this doesnot entirely explain why GSMoperators in much more competitiveenvironments in other countries arecharging such high tariffs


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Annex 1Framework dimensions

Table 1: Pervasiveness of the Internet

Level 0 Non-existent: The Internet does not exist in a viable form in this country. No computers with international IP connections are located within the country. There may be some Internet users in the country; however, they obtain a connection via an international telephone call to a foreign ISP.

Level 1 Embryonic: The ratio of users per capita is on the order of magnitude of less than one in a thousand (less than 0.1%).

Level 2 Established: The ratio of Internet users per capita is on the order of magnitude of at least one in a thousand (0.1% or greater).

Level 3 Common: The ratio of Internet users per capita is on the order of magnitude of at least one in a hundred (1% or greater).

Level 4 Pervasive: The Internet is pervasive. The ratio of Internet users per capita is on the order of magnitude of at least one in 10 (10% or greater).

Table 2: Geographic Dispersion of the Internet

Level 0 Non-existent. The Internet does not exist in a viable form in this country. No computers with international IP connections are located within the country. A country may be using UUCP connections for email and USEnet.

Level 1 Single location: Internet points-of-presence are confined to one major population centre.

Level 2 Moderately dispersed: Internet points-of-presence are located in at least half of the first-tier political subdivisions of the country.

Level 3 Highly dispersed: Internet points-of-presence are located in at least three-quarters of the first-tier political subdivisions of the country.

Level 4 Nationwide: Internet points-of-presence are located in all first-tier political sub-divisions of the country. Rural dial-up access is publicly and commonly available and leased line connectivity is available.

Table 3a: Sectoral Use of the Internet

Sector Rare Moderate Common

Academic - primary and secondary schools, universities

>0-10% have leased-line Internet connectivity

10-90% have leased-line Internet connectivity

>90% have leased-line Internet connectivity

Commercial-businesses with > 100 employees

>0-10% have Internet servers

10-90% have Internet servers

>90% have Internet servers

Health-hospitals and clinics

>0-10% have leased-line Internet connectivity

10-90% have leased-line Internet connectivity

>90% have leased-line Internet connectivity

Public-top and second tier government entities

>0-10% have Internet servers

10-90% have Internet servers

>90% have Internet servers

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Table 3b: The Sectoral Absorption of the Internet

Sectoral point total Absorption dimension rating

0 Level 0 Non-existent

1-4 Level 1 Rare

5-7 Level 2 Moderate

8-9 Level 3 Common

10-12 Level 4 Widely used

Table 4: Connectivity Infrastructure of the Internet

Domestic backbone

International Links

Internet Exchanges

Access Methods

Level 0 Non-existent

None None None None

Level 1 Thin ≤ 2 Mbps ≤ 128 Kbps None Modem

Level 2 Expanded >2 – 200 Mbps

> 128 kbps -- 45 Mbps

1 Modem 64 Kbps leased lines

Level 3 Broad >200 Mbps -- 100 Gbps

>45 Mbps -- 10 Gbps

More than 1; Bilateral or Open

Modem > 64 Kbps leased lines

Level 4 Immense > 100 Gbps > 10 Gbps Many; Both Bilateral and Open

< 90% modem > 64 Kbps leased lines

Table 5: The Organizational Infrastructure of the Internet

Level 0 None: The Internet is not present in this country.

Level 1 Single: A single ISP has a monopoly in the Internet service provision market. This ISP is generally owned or significantly controlled by the government.

Level 2 Controlled: There are only a few ISPs because the market is closely controlled through high barriers to entry. All ISPs connect to the international Internet through a monopoly telecommunications service provider. The provision of domestic infrastructure is also a monopoly.

Level 3 Competitive: The Internet market is competitive and there are many ISPs due to low barriers to market entry. The provision of international links is a monopoly, but the provision of domestic infrastructure is open to competition, or vice versa.

Level 4 Robust: There is a rich service provision infrastructure. There are many ISPs and low barriers to market entry. International links and domestic infrastructure are open to competition. There are collaborative organizations and arrangements such as public exchanges, industry associations, and emergency response teams.

Annexes

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Table 6: The Sophistication of Use of the Internet

Level 0 None: The Internet is not used, except by a very small fraction of the population that logs into foreign services.

Level 1 Minimal: The small user community struggles to employ the Internet in conventional, mainstream applications.

Level 2 Conventional: The user community changes established practices somewhat in response to or in order to accommodate the technology, but few established processes are changed dramatically. The Internet is used as a substitute or straight-forward enhancement for an existing process (e.g. e-mail vs. post). This is the first level at which we can say that the Internet has "taken hold" in a country.

Level 3 Transforming: The user community's use of the Internet results in new applications, or significant changes in existing processes and practices, although these innovations may not necessarily stretch the boundaries of the technology's capabilities. One strong indicator of business process re-engineeering to take advantage of the Internet, is that a significant number (over 5%) of Web sites, both government and business, are interactive.

Level 4 Innovating: The user community is discriminating and highly demanding. The user community is regularly applying, or seeking to apply the Internet in innovative ways that push the capabilities of the technology. The user community plays a significant role in driving the state-of-the-art and has a mutually beneficial and synergistic relationship with developers.

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Annex 2Meeting Schedule11-15 March 2002

Annexes

Monday 11 March Morning Mr Seife Mulugeta, Head, Standard and Quality Control department, Ethiopian Telecommunication

Agency (ETC) Ms Rosemary Arnott, British Council

Afternoon Mr Mulat Agumas, General Manager, Ethiopian Telecommunication Agency (ETA) Mr Wossenyeleh Tigu, Head of Legal Services, ETA Mr Tilahun Kebede and Mr Ibrahim Sanou, ITU Regional office for Eastern Africa.

Tuesday 12 March Morning Mr Fanta Adane, Internet Services Division Manager, ETC

Mr Moges Teferra, Deputy General Manager, Telecom Services Department, ETC Mr Adaga, ex-Deputy division Manager for Telemedicine and Manager IT and New Services, ETC

Afternoon Mr Asmare Abate, Telecommunication General Manager, ETC Mr Abdul Semed, Marketing Division Manager (Tariffs), ETC

Wednesday 13 March Morning Ministry of Infrastructures

Mr Amre Almayehu, Director Mobile Services Department, ETC Prof. Habtamu, Head of African Virtual University, and Dean of continuing and distance Education division, University of Addis Abeba.

Afternoon Mr Eshetu Fantaye, Practice Director, Africa, and Mr Jon Jones, Practice Director, Transnational Computer Technology (TCT) Mr Robel Dressa, Multimedia division, ETC

Thursday 14 March Morning Mr Eshetu Alemu, Director National computer and information center, Ethiopian Science and

technology commission (ESTC) Mr Haileyesus Mezgebu, Head IT Department, Commercial Bank of Ethiopia

Afternoon Mr Dawit Bekele, Professor, Addis Abeba University, Director Manager of Ethiolink Mr Berhanu Seboka, Manager, Global Development Learning Network Center, Ethiopian Civil Service College. Visit to the college’s Global Distance Learning Center

Friday 15 March Morning Mr Abi Woldemeskel, General Manager, Ethiopian Investment Authority

Mr Solomon Mammo, Manager, IT Department, Dashen Bank Mr Sirak Yohannes, Information and Communication Technology Manager, UNDP

Afternoon Debriefing

Documents

Internet From The Horn Of Africa: Ethiopia Case Study - ITU