1.

2 Background of the Organization

Ethio telecom, previously known as the Ethiopian Telecommunications Corporation (ETC), is an

integrated telecommunications services provider in Ethiopia, providing internet, mobile communications
and telephony services. Ethio telecom is fully owned by the Government of Ethiopia and maintains a
monopoly over all telecommunication services including open-wire, microwave radio relay; radio
communication in the HF, VHF, and UHF frequencies. Ethio telecom has some 7,100 cellular towers,
connected largely by microwave rather than fiber, and provides around 85 percent of Ethiopians at least
with 2G mobile coverage, 66 percent with 3G but just 4 percent with 4G (World Bank, 2019).

Historically, telephone was invented by Alexander Graham Bell March 10, 1876, in Boston,
Massachusetts (Farley, 2005). In Ethiopia, telecommunications service was introduced by Emperor
Menelik II in 1894 when the construction of the telephone line from Harar to the capital city, Addis
Ababa was commenced. This makes Ethiopian Telecommunications the oldest public
telecommunications operator in Africa. In those years, the technological scheme contributed to the
integration of the Ethiopian society when the extensive open wire line system was laid out linking the
capital with all the important administrative cities of the country.

After the end of the war against Italy, during which telecommunication network was destroyed, Ethiopia
re-organized the Telephone, Telegraph and Postal services in 1941. In 1952 the Imperial Board of
Telecommunications (IBTE) was established by proclamation No. 131/52 in 1952. The Board had full
financial and administrative autonomy and oversaw the provision and expansion of telecommunications
services in Ethiopia. The Imperial Board of Telecommunications of Ethiopia, which became the Ethiopian
Telecommunications Authority in 1981, was placed in charge of both the operation and regulation of
telecommunication services. In 1996, the Government established a separate 5 regulatory body, the
Ethiopian Telecommunication Agency (ETA) by Proclamation 49/1996, and during the same year, by
regulation 10/1996, the Council of Ministers set up the Ethiopian Telecommunications Corporation
(ETC).

In 2010 ETC was transformed to ethio telecom when the government outsourced its management for
three years (2010-2013) to Orange Group (formerly France Telecom) to improve its management system
and overall performance. This arrangement initially improved the company’s performance, though
quality of service remained weak (World Bank, 2019). The change led to a reduction in the work force
from 13,360 employees of the ETC to 8,691 (Official Records of Ethio Telecom, December 2013).
Currently, ethio has 16 000 permanent and 19 000 contract employees. Its total customers reached 45.6
million. From these mobile customers are 44.03 million (96.6 %) and fixed line 1.01 million. That makes
telecom density of Ethiopia 45.4 % (Ethiotelecom,2020).

In Ethiopia, the provision of mobile telecom services has begun in 1999 with a capacity of 36,000 lines in
Addis Ababa (Ethiopian Telecommunications Corporation, 2005).

In terms of ownership Ethiopia is one of the last three countries in the world (along with Eritrea and
Djibouti) to retain a national telecom monopoly on all telecommunications services. As a result, Ethiopia
lags with a huge margin from the other countries in Africa such as Egypt, Kenya, Nigeria and Sudan in
the availability and reliability of digital infrastructure by 56% in mobile phone service 2G/3G/4G
densities (World Bank, 2019). In 2018 the government of Ethiopia decided to liberalize the economy to
spur competition in several critical sectors, including telecommunications, which have the potential to
boost the economy. Particularly it has decided to accomplish a telecoms sector deregulation and market
liberalization agenda including part divestiture of ethio telecom and open the sector for competitor
operators to attain, among others, the following objectives: Economic growth through strong job
creation (both direct and indirect) and economic stimulation fostered by competition between and
among incumbent and 6 new entrant telecom operators. This change of policy seems to have created a
huge concern of customer satisfaction and retention on the part of the incumbent operator, ethio
telecom. For instance, in the same year, September 2018, ethio telecom made unprecedented (40%)
tariff reduction on mobile services (voice, SMS, and Internet) (Ethio telecom, 2018)

Political factors

Regulation issues come up frequently. The government has one idea how telecoms
should be handled. The people have another.

Wifi and internet are a daily part of life. Customers wish the government to acknowledge
the internet as a basic human right. It’s required for education and many careers. Even
applying to a job is an online experience; going to a company website and uploading a
resume on their servers is essential.

A battle for and against net neutrality is raging. Customers believe internet and data
should be treated the same by service providers and the government. Net neutrality
would prevent, for example, service providers from throttling internet and data speeds.

This is a big political fight between government, service providers, and the people.

Economical factors
Interest rates, inflation, and taxes affect the telecommunication industry. Expenses
affect the pricing per plan offered to customers too. It’s expensive to build towers and
resources in rural areas. Customers who don’t live in big cities are affected.

As more houses are built, the need for telecommunication resources increase. This can
drive prices (plus revenue) up depending on location, amount of customers in an area,
and the need for telecommunication services.

Growth is dependent on the market (customers) and technological advancements.

Businesses are using the internet and mobile phones for marketing. They create social
media pages, advertisements on sites, and digital marketing campaigns to reach
customers around the world.

For this reasoning, jobs are opening up and increasing in the telecommunication
industry.
Customer service representatives are hired to solve problems via website live chat.
Marketers, writers, and media managers handle online marketing and campaigns.
Graphic designers and programmers are necessary to create websites for computers
and mobile users.

The need for everything to be available and accessible 24/7 is growing rapidly.

Social factors
Telecommunications horizontal growth is limited. Specifically, it’s difficult (and
expensive) to expand in rural regions. Customers are left with less than a handful of
options when it comes to buying internet, mobile, and television packages.

Because telecommunication corporations are monopolies, they’re in charge of both

internet and mobile carriers. Customers need these packages to communicate with
friends, partake in social media challenges, buy products online, find stable careers and
more.

Telecommunication has become a vastly important aspect of the daily life of the
average person.

Technological factors
Both needs and requirements for telecom services are advancing. For example,
telephone companies install fiber wire in their builds over copper now. Phones are
becoming more compact, moving the telecom business into a primarily wireless
business.

Basic needs in smartphones, like voicemail, caller ID, and messaging are covered. Now
people want internet access on the go. So, data is added to mobile plans. Wifi has been
built into buses and cars too.

This ‘need’ leads to more investments in companies who hold a strong influence over
telecom developments in computers, smartphones, and laptops.

Legal factors
The telecommunication industry is often impacted by legislation issues. Particularly
issues with the government, monopolies, and customers. But the industry has allowed
importing and exporting of telecom products (international smartphones, for example).
Allowing more development in telecom tech devices.
Environment factors
Climate changes and global warming can affect how telecommunication products reach
customers. In terms of employment, with technology advancing, employees need to
adapt to changes.

Products come and go, often replaced by something ‘better’ (depending on who is
asked, customer or company). The previous version becomes redundant or
unnecessary. Which means people who worked on a previous version may now be
unemployed.

Customers demand and telecom companies are expected to deliver. But with needs in
the telecom industry changing often, it’s not guaranteed which technology will stay, be
advanced, or discarded.

3.2 Problems (1) Conditions of the Facilities

1) Subscriber access network (539,000 by copper and 6,000 by WLL) is not evenly developed in
comparison with its corresponding switching capacity of 554,000 LU, resulting in the long lists of waiting
applicants.

2) Many Obsolete Facilities The outdated use of paper-insulated cables in the outside plant causes faults
during rainy seasons and shall be rehabilitated. • • •

Manual boards and PBX are in use as the semi-automatic local exchanges and shall be replaced by 2010.
Analog switching systems shall be replaced with digital switching within the Short-Term Plan. Final
Report S - 1 - 6 The Study on Telecommunications Development Plan, Ethiopia

3) Analog transmission (2GHz-band UHF and P-P VHF) may be replaced with digital systems in the
Middle-Term period. Trunk transmission routes have been under the installation of the digital streams.
4) Traffic routing within a tandem area is to be simplified by re-routing the traffic in conformity with the
administrative tandem area.

5) Rural Network Almost no telephone services is available in rural/remote areas. Considering the high
cost required for the expansion of the rural service network, the gradual /reasonable extent of the rural
network expansion shall be plannned.

(2) Operation and Maintenance

1) Control of facility inventory records is insufficient.

2) Daily operations records are insufficient. • Failure/reparation records, inventry record • • • • • • •

Target control for failure rate Target control for faulty recovery time Plant record updating

3) Lack of spare parts and tools/measurement tools Maintenance procedure and management
responsibility for spares/tools/ measurement equipment shall be standardized. Inventory control for
spare parts shall be strengthened based on the statistical site data of the mean time between failure
(MTBF).

4) Additional vehicles for maintenance purpose will be required to shorten the fault recovery period. 5)
Traffic management for Service Improvement Standard operation schedule for traffic measurement
Target control for call completion rate Analyses of call loss points (route busy, no response or busy,
switch, network congestion, etc.) for preparation of measures and early expansion plan Application of
TQC