Complete Book PDF (4.12MB) - World Bank eLibrary

Corruption in the Telecommunications Sector in Ethiopia: A Preliminary Overview 335
Bank, have been granted special authorizations to operate independent
communication links supplied by the ETC.
Figure 8.2 provides an overview of the institutional setting in which
ETC currently operates. As indicated, major influence channels include
the following: 6
• MTC to the ETC. The ministry receives targets, goals, and plan objectives
from the Council of Ministers and relays these to the ETC. In
theory, the ETC could lose its license as an operator if it fails to meet
targets set by the ministry.
• MTC to the ETA. The ministry controls the appointment of the ETA
director and must approve the ETA’s annual report. The ministry sends
general policy initiative frameworks to the ETA for drafting.
• Council of Ministers to the ETA. The Council of Ministers controls the
ETA’s budget and reviews annual ETA performance.
• The ETA to the ETC. The ETA regulates the ETC and has the right to
adjudicate in disputes between the ETC and its customers. The ETA’s
licensing procedures are intended to hold the ETC to international
standards of efficiency and service quality.
Technical Performance of the ETC
Ethiopia has in recent years experienced strong annual subscriber growth,
particularly in the mobile sector, which has experienced a compound
annual growth rate of almost 90 percent since its inception in 1999 and
more than 100 percent in the past six years (figure 8.3).
Despite this high and sustained recent growth, which has seen mobile
penetration reach close to 4 percent in 2009, Ethiopia still performs poorly
in comparison with its neighbors in terms of overall telephone penetration
rate (figure 8.4). It has the second-lowest such rate in Africa and ranks at
the bottom in a regional assessment (BuddeComm 2009a). This is in part
a reflection of Ethiopia’s low per capita GDP (the second lowest in the
region) and the extremely dispersed nature of its population, of which only
16 percent live in urban areas. However, most international commentators
suggest that such poor performance can be attributed, at least in part, to
underlying weaknesses in the structure of Ethiopia’s telecoms market.
Financial Performance of the ETC
Available data, as reported in ETC 200x, are incomplete. However, the
available data suggest strong growth in income, coupled with high reported
gross profits (figure 8.5).