ETHIOPIA - INFRASTRUCTURE ROLL-OUT GATHERS PACE BUT MONOPOLY REMAINS

3 May 2002

Top Story

Ethiopia should be one of Africa’s larger internet markets but progress has been very slow. The Government has recently re-affirmed its monopoly through state telco, ETC but will be offering a minority shareholding in it. In spite of this, the infrastructure roll-out is now reaching larger numbers of towns. Back from a recent visit, Samuel Kinde looks at what’s happening.

 

Two developments over the past 12 months capture the nature of progress and challenge in IT in Ethiopia. The eventual completion of the UNDP financed project in Spring 2001 that has now added eight POPs (Points-of-Presence) in the provincial cities of Jimma, Awassa, Bahir Dar (not fully functional), Nazreth, Mekele, Dessie, Shashemene, and Dire Dawa and increased bandwidth available to internet users in Addis Ababa was a significant progress that was welcome by many IT enthusiasts in the country. On the other hand, the selective clamp down on Internet cafes by the Ethiopian Telecom Corporation (ETC) that went on for most of 2001, effectively neutralizing what had seemed to be a rapidly growing IT cottage industry only a year ago is, in many ways, indicative of the progress of IT in the country-one wrought with challenges and a slow pace.

 

Obviously, the completion of the UNDP sponsored project was the biggest Internet story in the country for the year 2001. According to Naod Missale, one of the network engineers from ETC who had participated on the project: "Over a span of 4 weeks, we had traveled to different parts of the country to install four large POPs at Dire Dawa, Jimma, Mekele and Awassa and additional small POPs in Nazareth, Shashmene, Dessie and Bahir Dar. Overall the regional POPs have a capacity to serve about 5120 subscribers. Each POP is connected to the central system with 64Kbps speed using the data network backbone. In Addis, there are 720 modem pools for up to 7200 subscribers. ETC itself is the first user of this Digital Data Network (DDN). The data communication equipment’s have been already installed in many sites in Ethiopia easing bandwidth problems."

 

Naod stressed the additional bandwidth being made available,"The gateway to international link will be 8 Mb/s. With the completion of the installation of the new system, a lot of new features have been added and will continue to be added such as free web-based e-mail, access to mail servers through HTTP [i.e., customers can reach their email boxes from anywhere through their web browser other than POP3 and SMTP], domain names with ".et" extensions, and last but not least getting leased Internet lines."

 

The ".et" domain names and dedicated direct leased lines are not in place yet. In fact, it may be several months before these will be available, according to some engineers we talked to. "Currently, the speed of access is at 1 MBps and will increase in the next couple of weeks to 8 MBps according to the Manager of the service," says Ato Abebe Chekol, Head of Information Services at the British Council.

 

Along with an increase in bandwidth, there is also a talk of revising the Internet service fees that the monopoly charges its customers. Our sources indicated that with the new fee schedule (based on usage instead of a flat-fee alone), Internet access may become a little bit cheaper than what it is now.

 

Currently, the largest network in the country in terms of potential user-base is the AAUNet, the Addis Ababa University’s fiber-optics and microwave-based local network that has a capacity to serve as many as 30,000 users. A local IT company called Micro Sun and Solutions (MSS) won the bid in 1999 to complete the first-phase of the project for a reported sum of about 5 million Ethiopian Birr. MSS reportedly completed the first phase of this project in November 2001. The AAUNet is financed by grants from a British NGO (Ethiopian Aid) and, in its just completed initial phase, connects the different campuses of the AAU at Sidist Kilo, Amst Kilo, and Arat Kilo. In the next phase of the project, AAUNet will connect the Building College at Lideta, the Medical Faculty at Black Lion Hospital, and the Faculty of the Veterinary Medical College at Debre Zeit to the network.

 

SIDA (Swedish International Development Agency) is planning to support the completion, future extension, maintenance and initial running of the project, according to an instructor at SISA (School of Information Science for Africa) whom we had approached to comment on this project. While the Sidist, Amst and Arat Kilo campuses are connected by a fiber-optics local area network, the Lideta Campus that houses the Building College, the Medical Faculty and the Veterinary Faculty are to be connected in the next phase using either a micro-wave link-up or the new DDN service introduced by ETC. There is an ambitious plan to extend the AAUNet as a National Educational Networking Center that will eventually connect the country¹s private and public educational institutions.

 

As of now, a 128 Kbps dedicated line is already installed that connects the AAUNet with the Internet through ETC. This connection is currently under test. However, the 128 Kbps connection does not adequately meet the bandwidth requirements of the anticipated user-base and the University is, we were told, looking forward to get a better bandwidth either through the ETC or through a direct satellite link.

 

What the completion of this project would mean for the quality of education at the university and elsewhere in the country is easy to imagine and very much anticipated by some of the faculty members and students we talked to. Once the university gets its domain name and dedicated line, all faculty members will be able to get a 24/7 access to the Internet right from their desktops in their office, rather than waiting in line at the computer labs as they do right now. Graduate and undergraduate students will also have access to the immense research resources of the Web with this uninterrupted access. There is already a talk on how, with the help of the 24/7 Internet resources, the university could benefit from the service and skills of Ethiopian professors and researchers working abroad. A professor who wanted to remain anonymous was, however, cautiously optimistic when we asked him what this will mean to him and his colleagues. "Certainly, if and when it is completed, the dedicated Internet connection will benefit us a lot. However, I am not sure when it is going to happen. 1, 3, 5 years? I don’t know. We hope it is soon."

 

Ato Abebe Chekol, who heads Information Services at the British Council and who was instrumental in organizing a successful IT conference in Addis Ababa in June of 2001 suggested that ETC is committed to providing more leased lines with its new upgraded system. "From what I hear, I think up to 30 leased line will be provided with the upgraded/improved capacity, " said Ato Abebe Chekol.

 

The biggest issue is ETC’s insistence on its monopoly of Internet Cafes. For most of 2001, the monopoly was busy closing some of the visible Internet Cafes in the city. As a result, what looked like a fast growing cottage industry of Internet Cafes in Addis Ababa in the latter part of 2000 when as many as 4-5 Internet cafes were popping up almost on a weekly basis everywhere in the capital, has now subsided drastically. Faced with a growing criticism, ETC eventually opened its own Internet Café in the Legehar area. "As long as we claim that other private cyber cafés are operating illegally, we have to provide the service sufficiently to meet the market," Ato Fanta Adane, ETC’s Manager of Internet Service Division, told local media in 2001 according to Addis Ababa's business weekly, Fortune. Unfortunately, there were reportedly only 2 PCs at the whole Café that ETC opened and both were down at the time of our visit; in fact, only one of them is allocated for web-browsing. Further, ETC appears to have been selective in the Internet Cafes it actively sought to close.

 

Intrigued by this selective closure of the city's few functioning Internet Cafes by ETC, we had attempted to talk to senior engineers and telecom executives at ETC about this and other issues. However, we were not successful.

 

We asked the same question to an IT manager in town who asked to remain anonymous. He explained, "It seems to me that ETC is mainly against IP telephony service. In our discussion with ETC officials, we were told that ETC doesn’t opposes cyber cafés if they provide e-mail, Internet and other services as long as they are not involved in some other illegal activities - Internet telephony and the like. I think ETC is also working in preparing a guideline to give license and permit legal form of cyber cafe operation under its control." Most of the owners of the Internet Cafes that were closed by ETC have now tweaked their business model and seem to be concentrating mostly on basic IT services, like networking PCs, repair and sales. We visited some of these ex-Internet Cafes and talked to the owners who were very reluctant to discuss the issue. An entrepreneur who declined to give his name commented, "Running an Internet Café business was, of course, profitable and one that I enjoyed. But the constant threat from ETC was something I just disliked and we quit the business almost a year ago." We asked him if his customers were using VOIP (Voice Over IP ­ Internet Telephony) and he replied, "ETC had built a firewall blocking access to all sites that enabled VOIP and I can not understand why ETC is using that excuse." Given the effectiveness of Internet cafes in making Internet usage affordable and accessible to the masses and their popularity everywhere around the globe, ETC (and its policy-making counterpart ­ ETA) are increasingly facing sharp criticisms for their policy that discourages and clamps down on private Internet Cafes. We have often heard ETC arguing that reselling of its basic Internet services by third parties does not make business sense to it and hence is illegal. However, ETC itself is a reseller of Internet services from global Internet network to start with! Other African countries could be sited as excellent examples where Internet Cafés have actually brought the promises of Internet to millions. Given the economic potentials that these small industries carry, increasingly, there is a feeling that ETA and ETC can do the country a lot of economic good if such Internet businesses are encouraged.

 

Another area the benefit of which is slowly being realized in the country is that of telemedicine ­ health care delivery where physicians examine distant patients through the use of telecommunications technologies. At least two publicly announced initiatives are being pursued in the country. The first one involves about ten hospitals in the country (Zewditu, Paulos, Nazret, Jijiga, Hosanna, Gondar Medical University Hospital, Mekelle, and Jimma Medical University Hospital) connected via the Internet to the Medical Faculty of the Addis Ababa University and Black Lion Hospital in a single telemedicine network. The focus of this initiative is to provide the necessary telemedicine network infrastructure for consultation on dermatology between physicians at the various hospitals and the Medical Faculty.

 

There is also a talk about extending the network to include smaller clinics and provincial health centers. Obviously, if and when completed, this will allow for specialty care for patients in the various provinces and regions of the country. We were told that ECA (Economic Commission for Africa), WHO, Worldspace and a Japanese university have committed themselves to the project which is scheduled to be completed by 2002 or 2003.The second initiative involves that of the Balcha Hospital, the Russian Red Cross and some Russian Hospitals in tele-radiology. This project will require equipping Balcha Hospital with an X-ray computer tomograph along with the required telemedical equipment. However, despite what we heard about the commitment of the Russian Red Cross and the Ethiopian Ministry of Health itself, we feel that the steep cost of the project in the neighborhood of $5 million may prevent it from seeing light of day. Besides, there seems to be the necessary skill inside Ethiopia in radiology and the need to connect Balcha hospital does not seem very compelling.

 

The past 8 to 9 years seem to have highlighted the obstacle imposed by a monopoly on the growth of Internet penetration in the country. While ETC still deserves some praises for its critical role in getting Internet connectivity in the country in the first place, the absence of competition in the ISP area has been one of the major obstacles for the dismal level of growth rate in Internet connectivity in the country. ETC has been long arguing that a free and unregulated ISP market will hurt customers. Few seem to be convinced with this line of argument, however. Further, results in other countries including the more pertinent examples of African countries like Kenya, Uganda, Ghana and Egypt overwhelmingly show that monopoly definitely hurts Internet penetration and deregulation helps foster its growth.

 

Surprisingly enough, there has been a talk on a semi-privatization of the telecom monopoly for many years now (at least 8 years!) along the lines of finding a suitable strategic partner. The service of the UK offices of PriceWaterhouse has been sought to help ETC in finding a minority stake holder. From what we have heard, PriceWaterhouse will be ready to submit its findings as early as May of this year. There are some who expect that ETC may even select its minority share holder as early as the beginning of 2003.

 

So, the obvious question will be: Will Ethiopian current and potential Internet users benefit from this? Undoubtedly, any relaxation of the current outdated and lethargic regulations will bring some tangible benefits such as quick response to customer demands, reduced interference with private Internet-based businesses (particularly Internet Cafes), etc. It still remains difficult, however, to suggest that anything less than a free atmosphere for ISP-business will bring very significant changes in Internet penetration. This is not to say that there is a lack of will from the country's telecom executives; but the fact that the decision making processes, particularly those related with policy and regulations, require a tacit approval from top government leaders is simply non-conducive to the type of unbridled growth Internet penetration has seen time and again in every other part of the world. To make matters worse from a policy point of view, one of the government ministerial bodies just recommended on April 12, 2002 that Internet access in Ethiopia be exclusively offered by the government! This is clearly worrisome and raises legitimate concerns about the prospects of telecom, particularly Internet, in the country.

 

Some are, however, optimistic that with ETC, at last, having the counsel of a minority stake-holder will improve conditions for Internet penetration, services and Internet-based businesses. A source in Addis Ababa who wanted to remain anonymous said, "At least if not a full privatization, this development would also help development of the telecom sector and also to the provision of a better service to the public. I think this would also help pave the way for full privatization. However, if all of a sudden the government goes for full privatization and that one operator remains hold of the sector again the same or worst problem may also arise. And in fact the government’s main reason for not privatizing the telecom service (at least the basic one i.e. telephone) is because of its aim to reach the disadvantaged rural community. I think for this or other reasons, a careful process of privatization should be undertaken."

 

The writer may be reached at bikila_97@yahoo.com. The first article on this subject was published on MediaETHIOPIA in February 2001. Click here for article:

http://www.mediaethiopia.com/Engineering/

internet_in_ethiopia_revisited.htm

 

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