Ramping up telecommunications for sustained growth   By Belayneh Akalu 08/07/13 The last decade or so has been characterized by exponential growth in infrastructure. There have been radical changes in the roads, sanitary and health services, housing facilities, communication services. Developments in infrastructure and service provision along with agricultural and industrial activities are the order of the day in the country. That has rightfully been backed by two digit rates of economic growth in the past decade. Sustaining the economic achievements attained and transforming the country into a middle income country are set as the next stop in this adventurous ride. That, however, is one daunting task that requires facing up to and conquering a complicated set of challenges. The major challenges include optimizing agricultural and industrial productivity, food security, private sector participation, natural resource conservation and utilization, fiscal policy, infrastructure, capacity building and good governance. At the core of all the major challenges stated above is an information and knowledge gap that needs to be narrowed down. Considering the 21st century is frequently referred to as the information era, it comes as a no brainer that developing Information and Communication Technology (ICT) would immensely help provide the ammunition in fighting the vises weighing down on our society. As the rest of the sectors in the economy, ICT also enjoyed a remarkable development in the last decade. The coverage of internet, mobile and wireless telephone services along with other information and communication technologies was barely existent just over a decade ago. The current mobile service capacity of 23 million was as low as 6.52 million only in 2009/10 showing the dramatic growth of the sector in the country. Considering the diversity and coverage of ICT services available today, it is easy to see that the country has come a long way from the alienation of the old days.   There, however, are numerous problems related to quality and coverage of the service as the sector is only expanding and still a long way from maturity. It has been quite a while now since the public has started to complain about the horrible reception on mobile phones. Addis has been no exception as network quality has increasingly gone down in the last few months. Especially the huge housing projects located near its outer limits and have become homes to hundreds of thousands, if not over a million, of people suffer from chronic reception problems. It is barely possible in these places to make a call or get a decent internet connection. Outside of Addis, reception quality is relatively better in small road side towns and major cities leaving much of the hinter land out of range. Such communication barriers certainly affect the country’s development efforts negatively as the increased economic activities apparent nationwide would be better served with the availability and accessibility of ample information. The availability of high quality, accessible and reliable internet and telecom services makes the process of starting up and running business easier as governmental, private and nongovernmental organizations would find it easy to make themselves more accessible. With telecommunication, some of the physical constraints of an organization can be removed in all sectors of the economy. This will allow increased productivity through better management and administration. “In a system, the function of telecommunications may be likened to that of the nervous system in a living organism. We all know that without rapid and reliable exchange of information between all parts, effective control and co-ordination of such systems would not be possible. Therefore, optimum use could not be made of the resources available for the development of the system.” Just to highlight some of the applications of telecommunications in some sectors, we can consider a few. The term "Telecommunication medicine" which is the use of electronic equipment to link physically separated health facilities is increasingly becoming common in developing countries. Farmers in rural areas can be informed future events of natural disasters like thunderstorms, possible earthquakes, flood and destructive pests through the aid of simple meteorological information. With the advancement of telecommunication services, a new market mechanism, low cost structure and expanded value chain of firms is possible (Kambil and Short (1994)). On the other hand, studies show that, in developing countries the average price of agricultural commodities is high in areas where there is telephone facilities available than areas where there is no facilities to communicate. In addition to providing programs of formal and informal education via computer networking (Distant learning), telecommunications have now been made more effective both in scope and in quality through the use of telecommunication satellites. In the transport and tourism sectors, telecommunication is used in Hotels/Airline reservation tickets and management of courier services. It is also used to land and Fly airplanes; it is also effectively used in the management of fleet of vehicles in freight and passenger transport.   Low quality, inaccessibility and unreliability of the technologies would, on the other hand, hamper business from flourishing as it would lead to problems of credibility, timeliness, pricing, capacity building, networking and market expansion. The impacts of these problems obviously leave their marks on all sectors of the economy along with economic activities as price setting and exporting; thus posing themselves as obstacles to the development efforts in the country.     The 2010/11 fiscal year reorganization of the Ethiopian Telecommunications Corporation into Ethio−Telecom is an all too well recognition of the sector’s vital role. The reorganization aims at attaining the goals set in the Growth and Transformation Plan (GTP). As stated in the Growth and Transformation Plan (2010/11 – 2014/15) Annual Progress Report for fiscal year 2010/11, “Upgrading the already built ICT network to accommodate emerging latest information technologies; improving network quality and expansion of services; ensuring all inclusive telecommunications service delivery and ICT assisted development; build the capacity of human resources in the sector; finalize ongoing network building projects to benefit from latest information technologies with high quality integrated telecom services package and with reasonable price are main strategies of the sub sector in the GTP period.” The annual report further states that there were certain achievements within the first year of the GTP. Accordingly, the number of mobile subscribers and telecom density for mobile lines increased from 6.52 million and 8.7% in 2009/10 to 10.7 million and 12.85% in 2010/11. The coverage of wireless telephone service also increased from 50% in 2009/10 to 90% in 2010/11 while the number of subscribers and telecom density for fixed line declined from 1.36% in 2009/10 to 1.03% in 2010/11 indicating an absolute decline in the number of fixed line subscribers. The recent 1.6 billion dollar deal between Ethio Telecom and the two Chinese telecom giants, Huawei and ZTE, takes the country’s effort to modernize its telecom sector to a whole new level. Under the new deal, Ethio Telecom is going to divide the country into 11 infrastructural zones that would help attain better operational management. The Chief Executive Officer (CEO) of Ethio Telecom, Andualem Admassie, remarked during the signing of the agreement that the two companies would share the project in half. He further mentioned that the customer service supply side of the project would be carried out by Huawei while ZTE handles Security Operation Centre and Operation Support Centre.  In addition to ensuring mobile service access, the expansion project would incorporate network backhaul, transmission and fiber optics capacity increment and utilization of the latest technology in its network lot. The information system lot, on its part, includes IP service, Customer Billing System, customer relations management system, next generation call centre, security operation centre, telecom fraud management, video surveillance, operation support centre and multi value added services. The expansion project contract, when completed, would enable Ethio Telecom raise its overall network coverage to 85% of the country. In addition, the project would help the whole country benefit from third generation (3G) services while gracing Addis with fourth generation (4G) technology – a broad band technology allowing browsing speeds of 100mb per second. According to Deputy Prime Minister and Minister of Communications and Technology, Debretsion Gebremichael, the project would help surpass the targeted 40 million mobile phone subscribers by 2015 by an additional 16 million.  The amount of money invested and scope of the project clearly shows that this is yet another one of the mega projects Ethiopia has recently embarked on. Various media outlets have thus reported that the project would equip Ethiopia with Information Communication Technologies that meet global standards. Roughly translated, global standards entail great reception of mobile phones in very large parts of the country, high speed internet service and the like. That certainly is the kind of news mobile and internet subscribers in and outside of the country have been looking forward to listening. Apart from the customer satisfaction side of it though, the project would help draw foreign investment as the availability of such services creates an environment that supports advanced business practices.     Telecommunications play an increasingly important role in the world economy and the global telecommunications industry was a $4.7 trillion sector in 2012. The service revenue of the global telecommunications industry was estimated to be $1.5 trillion in 2010, corresponding to 2.4% of the world’s gross domestic product (GDP). As the sector is only expanding in our country, Ethio Telecom needs to work hard to tap into this huge national and international market. Clearly, staying connected pays off both at local and international levels. Such huge investments in the sector should, therefore, be made to strengthen the sector and get the best out of connecting with each other and the rest of the world. In that regard, the recent deals of Ethio Telecom with Huawei and ZTE are tremendous steps taken towards ensuring the sustainability and transformation of the country into a middle income country.