Addis Fortune (Addis Ababa)

Ethiopia: They Are Victims of Their Own Inaction

editorial

Just last week, one of our editors was on the phone with a senior official of this administration. To their dismay, they could not have a decent discussion. The terrible Ethiopian mobile phone network system frequently interrupted their conversation.

In fact, they are perhaps among tens of thousands of customers who are unable to have a mobile telephone network that simply works to any reasonable level of satisfaction. If there was ever a time for the public's euphoria which originally accompanied the introduction of the country's mobile phone service to fade away, it was last week. The mobile telephone service in this country became even more inefficient, defective, enervating, irritating and time wasting.

What is the point of a mobile phone service if you are forced to make half a dozen attempts before you can get connected? Even then you are faced with interruptions or are likely to be disconnected every couple of minutes. It is so bad that at the end of the day you cannot even get your message across with the extremely poor voice quality.

Thus, our editor and the senior official could not help but switch to the good old days. They continued their conversation through the landline system.

Any government, which embraces change and technological advancement, does so for the logical reason of advancing social well-being. It introduces the right policies and legislative frameworks in a bid to maintain order, to create a level playing field for the actors in the sector and to protect the public from abuses and neglect. Who owns the infrastructure is the least a government should worry about so long as its laws are respected and the actors are playing by the book.

The questions a responsible government should answer when adopting new technologies are very simple and incredibly basic: to whose benefit and at what cost are these being introduced?

The deplorable service provided by the state monopoly Ethiopian Telecommunication Corporation (ETC) appears to be far from benefiting the public and very poor in terms of cost. As the experience of our editor reveals, the victims' roster includes the policy makers themselves, together with those who are entrusted, but fail miserably, to manage Ethiopia's communication infrastructure. We are certain that even the top managers of ETC are not privileged to have a specially designed mobile network any different to that which they provide the public. They are victims too.

Why, then, are ETC's managers reluctant to tackle the problem at its root? Instead they continue to lament about the technical matters and place the blame on the mobile phone service expansion. The fundamental cause of the mishap actually lies elsewhere.

ETC is confronted with two fundamental problems: one is a making of its own and the other should be dealt with at a policy level. It is becoming all the clearer, ETC is a state monopoly besieged by inefficient management. Almost two years after a management overhaul, those in charge have shown nothing but failure.

Take for instance their performance report for the first quarter of this year: it achieved 65.1pc of its target in enlisting new subscribers. The proportion of new internet subscribers was only 49.2pc, while the figure for additional mobile customers was 32.8pc, and for data communication circuits, 12.7pc.

Ironically, its highest success was registered in handling telephone traffic. But then, the public has no other choice but to go through their system. It registered a 102.9pc achievement of its target in international traffic, 107.3pc from the internet, 107.3pc from international mobile usage and 66.9pc from local mobile traffic.

ETC is also good at meeting its expenditure target: It spent 96.3pc in the quarter year, while investment spending for capital goods was at 96.3pc. One can draw the reasonable conclusion that ETC's management is much better at spending tax payers' money than it is in providing a service.

The administration's response to this, since it came to power, has been a series of management reshuffles. The results, however, were never satisfactory, even for those who are the most protective of the telecom monopoly. As a matter of fact, all the dilemmas that beset the telecom services in this country emanate from one big monster: state monopoly.

Arguing against such a monopoly is not a matter of ideology, as some diehard leftists in the administration, responsible for Ethiopia's infrastructure development effort, would have thought. The problem rather lies with their argument for a policy they harbour which is too weak to even convince themselves and causes everyone else unnecessary inconvenience.

Aside from their genuine motive to keep the monopoly, they argue that letting ETC to fall into the private sector domain would disadvantage the rural community. They seem to have convinced themselves that apparently greedy, private, companies would chase the profit in the urban profitable areas at the risk of neglecting the rural community.

This argument, if it has any merit, may sound right in the sense that private companies are always driven by a profit motive. For the sake of argument, though, companies have proven their social face and their humanitarian impulses once they have reached a certain stage when earning profit is all but taken for granted.

The true motive behind Ethiopia's well guarded monopoly of the telecommunication infrastructure is more to do with the fear of the unknown in surrendering its age old, state-grip of something as strategic as the communication infrastructure. Another motive, of course, is related to collecting the couple of hundred of millions of Birr in profit. This year it was over 130 million Br.

If smart and thoughtful policy makers could have it both ways, they would still give room for private operators in the industry and keep the company they cherish with so much zeal, even at the expense of the public. It may sound impossible at this stage to slay the monster. But we are not calling for the complete dismantling of the state owned ETC.

We, however, firmly believe that there are still ample opportunities for improving the traditional telecom services in general, and the new technologies, in particular, by applying a little more pragmatism or flexibility. As we have been insisting over the years, the problem lies with the deficient and outdated policies this administration is still clinging to when it comes to the ETC.

Changing these polices, surely but gradually, requires the corporation to be made to hand over some of its services to private operators. Modern services such as the mobile phone and Internet are fast growing and need a very flexible and dynamic management.

This could only be done by allowing for private servers that have the capacity to keep up with technological breakthroughs. ETC has no such financial and technical capability and the logical thing for it to do would be for the government to invite foreign and domestic companies to fill the gap.

The concern of the conservative policy makers within the telecom establishment that relinquishing these services to private operators might lead to the neglect of the rural population could be addressed. For example, it could be counterbalanced by the positive impacts that might be generated by the involvement of private servers in terms of job creation, technological transfer, and increased tax revenue for the government.

If they are serious about their quest for a solution, officials could recover the 100 million or so Birr corporate profit they have generated from ETC from other operators. That would also help ETC fight head to head, not only to meet their obligation to the state, but also to excel in the competition. Such competition would certainly guarantee a benefit for providers, the state and the public at large.

Anything short of this, then how much worse should the mobile phone havoc grow before the administration stops defending ETC's monopolistic turf at the cost of the public?


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