Abstract
Executive summary
Ethiopia is the last country in Africa allowing its national telco, ETC a
monopoly on all telecom services including fixed, mobile, Internet and data
communications. This monopolistic control has stifled innovation and retarded
expansion. The government tries to encourage foreign investment in a broad
range of industries by allowing foreigners up to 100% equity ownership.
However, there is no official schedule for the privatisation of the national
carrier and the introduction of competition, but once this happens, the
potential to satisfy unmet demand in all service sectors is huge.
Ethiopia has the second lowest telephone penetration rate in Africa, but it
recently surpassed Egypt to become the second most populous nation on the
continent after Nigeria. However, it is also one of the poorest countries in
the world with approximately 80% of the population supporting themselves
through subsistence agriculture, which accounts for more than half of the
country' s GDP.
Despite the monopoly situation, subscriber growth in the mobile sector has
been excellent at a compound annual growth rate (CAGR) of almost 90% since its
inception in 1999 and more than 100% in the past six years. However, demand
has been even stronger, and ETC has been unable to satisfy it. Ethiopia' s
mobile market penetration is still one of the lowest in the world at little
more than 3%. Fixed-line penetration is even lower, and this has also impacted
on the development of the Internet sector. Prices of broadband connections are
excessive.
Improvements are beginning to develop following massive investments into
fixed-wireless and mobile network infrastructure, including third generation
mobile technology, as well as a national fibre optic backbone. Ethiopia is
investing an unusually large amount, around 10% of its GDP, into information &
communication technology (ICT). However, telecommunications revenue has grown
only moderately in comparison, at around 16% per annum. It has remained under
2% of GDP, a low figure in regional comparison.
Key highlights:
- Forecasts for fixed-line, mobile and Internet markets to 2010 and 2015;
- Comparison with other countries in the region in terms of GDP, mobile,
fixed and Internet market penetration;
- Detailed profile of the monopoly service provider in all market sectors;
- Launch of 3G mobile service in market with excessive broadband pricing;
- Extensive rollouts of national and international fibre infrastructure;
- Multi-billion US$ investments planned before 2012.
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