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Corruption in the Telecommunications Sector in Ethiopia: A Preliminary Overview 339
• Providing slow, unreliable Internet access. This continues to be reported
as a problem.
• Charging high rates. Although premium communication services in
Ethiopia are indeed costly, some basic domestic services are not. A 2006
comparative study of the cost of international bandwidth in Africa
found that costs in Ethiopia were approximately double those in neighboring
Kenya, broadly comparable to Cameroon and Malawi, and less
than in Ghana (Balancing Act Africa 2006).
• Seeking to curtail and control communication services. Following the disputed
2005 elections, the short message service (SMS) was disabled.
Internet cafés were not formally permitted until 2005, and (relatively
cheap) Internet telephony is still banned. In 2006, the ETC created a
new organization, the Network Operation Centre, to fight illegal Internet
telephony. Although part of the underlying reason for this focus
may have been to protect revenue streams, the perception articulated
repeatedly was that telecoms services had been used to limit communications
in the period following the election.
• Managing the billing system poorly. Major problems were experienced
with a new billing system installed in 2004. In 2006, the system failed
completely, resulting in a revenue loss of US$6.3 million. The entire
customer database was lost and there was no backup, even though the
equipment for such a backup had reportedly been procured (Budde-
Comm 2009b).
• Coordinating technical standards poorly. Several cases have been reported
in the media of major investments in the sector apparently being wasted
as a result of incompatibilities between equipment provided by different
suppliers (Balancing Act Africa 2009).
• Having weak procurement systems. Several cases have been reported in
the media of follow-on contracts being awarded to nonperforming suppliers
and of stipulated procurement procedures being manipulated,
bypassed, or simply ignored. The Federal Ethics and Anti-Corruption
Commission (FEACC) is currently investigating several such cases, one
of which is examined in more detail in the “Procurement of Equipment
Suppliers” section below. Some domestic and international observers of
Ethiopia’s telecoms sector have expressed concern at possible market
distortions arising from Ethiopia’s increasingly close political relationship
with China. 9