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334 Diagnosing Corruption in Ethiopia
currently investing about 10 percent of GDP in the sector, an unusually
high level of investment by international standards. Investments are currently
directed into fixed wireless and mobile network infrastructure,
including third-generation (3G) mobile technology as well as a national
fiber-optic backbone.
Current Institutional Setting
The ETC is the sole provider of telecoms services in Ethiopia, providing
fixed-line, mobile, Internet, and data communications services as well as
related training services. As a state-owned company, 4 the ETC has management
autonomy, a separate legal personality, a supervising authority,
and a management board. It must maintain accounts that are audited
annually by the government-owned Audit Services Corporation (ASC).
The ETC’s liability is limited to its assets. 5 Provision of telecoms services
is to some extent regulated by the ETA. In providing such services, ETC
is responsible for
• Design of the telecoms network
• Procurement of telecoms equipment
• Construction, installation, and maintenance of the equipment
• Provision of telecoms services to the public.
Although the ETC’s monopoly rights are reported as having been
granted under a license issued by the ETA in 2002, some uncertainty surrounds
the details and current status of that license, including whether
the ETC ever entered into a related agreement over mandatory performance
standards. The ETC enjoys privileged access to foreign exchange
but is deemed to be independent of government funding and to generate
its own funding through services provision.
The ETA regulates the telecoms sector. It is responsible for ensuring
that “effective, reliable and affordable telecommunications services are
equitably distributed to the entire people in Ethiopia in compliance with
the industry standards, and consumer protection is ensured.” Its stated
responsibilities include the supervision of the ETC, the regulation of tariffs,
and the specification and coordination of technical standards and
procedures. Under Ethiopian law, no person may operate any telecommunications
service without obtaining a license from the agency. In 2002,
the ETA licensed the ETC as the sole national operator of telecoms services.
The provision of terminal equipment is liberalized, subject to ETA
approval. About 20 entities, including Ethiopian Airlines and the World