State monopoly of telecommunications in Ethiopia: origins, debates, and the way forward

ABSTRACT

A rare breed in the era of deregulation, Ethiopia’s state-controlled telecommunications sector has been a source of intense debate involving domestic and international stakeholders. Based on analysis of interviews, this essay explores the Ethiopian state’s rationales for state monopoly of telecommunications within a developmental-neopatrimonial state framework. Despite external and internal pressures to deregulate the sector, EPRDF considers state control of telecommunications as a model that fosters universal access/service and generates considerable revenue. Notwithstanding the Ethiopian government’s historically unwavering position, the article concludes by making a case for public-private partnership as a sustainable model for telecommunication operation in Ethiopia.

RÉSUMÉ

Un phénomène rare à l’ère de la dérégulation, le secteur de télécommunications éthiopien entièrement contrôlé par l’Etat a été la source de débats intenses impliquant des parties prenantes nationales et internationales. Basé sur l’analyse de plusieurs interviews, cet article examine les raisons de l'Etat éthiopien d’instaurer un monopole d'Etat des télécommunications dans un cadre étatique développemental-néopatrimonial. Malgré les pressions internes et externes pour déréguler le secteur, le parti au pouvoir EPRDF considère que le monopole d’Etat des télécommunications est un modèle qui favorise l'accès / le service universel et génère des revenus considérables. Malgré la position inébranlable du gouvernement éthiopien, l’article conclut en plaidant en faveur d'un partenariat public-privé en tant que modèle durable pour l’organisation des télécommunications en Ethiopie.

KEYWORDS:

• Deregulation
• Ethiopia
• telecommunications
• EPRDF
• developmental state
• monopoly

MOTS-CLÉS:

• Déréglementation
• Ethiopie
• télécommunications
• EPRDF
• Etat développeur
• monopole

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Téwodros W. Workneh is Assistant Professor of Global Communication at the School of Communication Studies, Kent State University. Dr Workneh’s research explores global media industries as well as flows through critical political economy and postcolonial approaches. His most recent work focuses on discourses of telecommunications deregulation in Sub-Saharan Africa.

ORCID

Téwodros W. Workneh http://orcid.org/0000-0001-8301-2696

Notes

1 A monopoly represents a condition where all sales in a given industry or market are dominated by a single firm or service provider. A natural monopoly is a characteristic of an industry or market where it is believed the presence of a single firm that is responsible for all production is most efficient since it involves the lowest production costs. For a theoretical discussion of natural monopoly, see Baumol (1977), Liebowitz and Margolis (1996) and Posner (1969).

2 The total interview recording amounted to 21 hours and 43 minutes, and an ‘intelligent verbatim’ transcription of approximately 115,000 words. Interviewees were Debretsion Gebremichael, Minister of Communication and Information Technology and Deputy Prime Minister of FDRE; Jan Mikkelsen, IMF Resident Representative in Addis Ababa, Ethiopia; David Shinn, former US Ambassador to Ethiopia; Josefita Pardo de León, Legal Affairs Officer, Accessions Division, World Trade Organization; Mereid Bekele, IP Next Generation Network (NGN) Project Consultant at Ethio-Telecom; Woldeloul Kassa, Data and Network Design Consultant at Ethio-Telecom; technical trainer, ZTE Ethiopia (unnamed); five marketing officers at Ethio-Telecom (unnamed); Endalkachew Hailemichael, prominent blogger and Internet freedom activist; three branch managers of Ethio-Telecom in Addis Ababa (unnamed).

3 Personal communication, Debretsion Gebremichael.

4 In 2013 Ethio-Telecom made a landmark agreement between Chinese telecom giants Huawei and ZTE for a nationwide telecommunications infrustructure development with a US$1.6 billion vendor credit arrangement involving the EXIM Bank of China. For Chinese involvement in the Ethiopian telecommunciations sector, see Workneh (2016).

5 Retrieved from World Bank data at https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=ET.

6 Personal communication, Ethio-Telecom Marketing Officer (unnamed), 30 October 2017. Note that Ethio-Telecom’s management was outsourced to France Telecom-Orange for a two-year contract between 2011 and 2013. Part of the deal with France Telecom-Orange was based on maximising profit margins, which made the French company to focus of the sale of mobile subscriptions at the expense of household broadband connectivity which was seen as less profitable and more time consuming, thereby severely contributing to the ‘last mile’ challenge (personal communication, Mereid Bekele, 28 November 2014).

7 Personal communication, Jan Mikkelsen, 20 September 2013.

8 EPRDF’s self-proclaimed track record of upholding loyalty to party programmes – and at times interests – before educational or qualification merit is well documented (see Bach 2011; Milkias 2011)

9 Personal communication, Endalkachew Chala, 13 November 2017.

10 For a comprehensive analysis of current political reforms in Ethiopia, see Mamo (2018).