A4: Are there legal, regulatory, or economic obstacles that restrict the diversity of service providers?

Freedom house continued…

The space for independent initiatives in the ICT sector, entrepreneurial or otherwise, is extremely limited. Ethio Telecom holds a firm monopoly on fixed-line and mobile services, though the government licensed a second telecommunications provider after the coverage period.

In June 2021, after the coverage period, the Ethiopian Communications Authority (ECA) licensed the Global Partnership for Ethiopia as the country’s second telecommunications provider. The Global Partnership for Ethiopia—a consortium led by Safaricom that also includes Vodafone, Vodacom, the Sumitomo Corporation, and the CDC Group—bid $850 million for the license. In June 2020, the ECA reported receiving 11 complete submissions from operators applying for two new telecommunications licenses offered by the government.

In May 2020, the government announced its intent to sell a 40 percent stake in Ethio Telecom, a step toward opening the country’s market up to other players. A tender process for the sale was launched in June 2021, after the coverage period. An estimated $40 million of the $300 million World Bank loan finalized in September 2019 is committed to support the diversification of the telecommunications sector, including the restructuring and partial privatization of Ethio Telecom.

China is a key investor in the Ethiopian telecommunications industry. Two major Chinese firms, ZTE and Huawei, were involved in upgrading Addis Ababa’s mobile broadband networks to 4G technology and expanding 3G networks elsewhere. In February 2020, Ethiopian government paid Huawei 173 million birr ($5.6 million) to install long-term evolution (LTE) network infrastructure in Addis Ababa. The partnership enabled the government to maintain its hold over the telecommunications sector, though the networks built by the Chinese firms have been criticized for their high cost and poor service. In May 2018, Beijing-based telecommunications company Hengbao was contracted to supply SIM cards for Ethio Telecom. These relationships have led to growing fears that Chinese entities may be assisting the authorities in developing more robust ICT censorship and surveillance capacities (see C5).

While the government maintains that ICT infrastructure is key to modernizing the economy, onerous government regulations still stymie the sector. For example, imported ICT items are tariffed at the same high rate as luxury items, unlike other imported goods such as construction materials and heavy-duty machinery, which are given duty-free import privileges to encourage investments in infrastructure. Ethiopians are required to register their laptops and tablet computers with the Ethiopian customs authority before they travel out of the country, ostensibly to prevent individuals from illegally importing electronic devices. Observers believe the requirement enables officials to monitor citizens’ ICT activities by accessing the devices without consent.

Cybercafés are subject to burdensome operating requirements under the Telecom Fraud Offences Proclamation of 2012, which prohibits them from providing Voice over Internet Protocol (VoIP) services and mandates that owners obtain a license from Ethio Telecom through an opaque process that can take months. Violations of the requirements entail criminal liability, though no cases have been reported.


By selegna

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