Ethiopia's tribal junta stifles information technology growth

September 23rd, 2009 |

Ethiopia's regime continues to monopolize telecom services including fixed, mobile, Internet and data communications. This monopolistic control has stifled innovation and retarded expansion.

The government U.S. and WorldBank-financed tribal junta led by its genocidal leader Meles Zenawi, 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. [This is done on purpose by the U.S.-backed regime to keep the people of Ethiopian in the dark age]. 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.