Ethiopian Parliament has passed a new law to regulate the telecom sector in Ethiopia with the aim of opening the telecom sector to all eligible telecom companies who wish to participate in the telecom sector. Many believe that this is huge step forward in reforming the country’s stagnant and backward telecom sector. The repealed Telecommunication Proclamation No. 49/1996 and other related laws grant telecom operation license only to Ethio-Telecom, a government owned telecom provider, to operate in the telecommunication sector in Ethiopia excluding all other private investors, both local and foreign, from obtaining such license except for limited value added services licenses. The repealed laws gave Ethio-Telecom an absolute monopoly over the sector as it is the only authorized telecom service provider in Ethiopia.
The new law repeals the:
- Telecommunications Proclamation No. 49/1996;
- Telecommunications (Amendment) Proclamation No. 281/2002 and
- Telecommunications Services Council of Ministers Regulation No. 47/1999;
It is to be recalled that Ethiopian government has announced its plan to also partially privatize Ethio telecom, Ethiopian Airlines, power and logistics companies retaining the majority shares. Many believe this new law is part of the government’s bid to liberalize the general economic sector of the country.
Key aspects of the new law
The New Telecommunication law has two main objectives. These are:
- Liberalizing the telecom sector and
- Establishing an independent communications regulator that will be responsible for regulation the telecom sector and promoting healthy competition.
- Liberalizing the telecom sector
Under the repealed telecommunication laws and the Ethiopian Investment law, telecom sector was an area fully reserved for government or Joint investment with the government. Private entities were not allowed to invest in this sector independently apart from government sanctioned telecom expansion project works as well as limited value added services and resale services, which are service provided for a third party for sending or receiving call or data messages by charging service fees. Under the previous laws Ethio-Telecom was the sole telecom service provider in Ethiopia and has the monopoly of the market.
However, under the new telecommunication law clearly stipulates that telecommunication services, including ownership of telecommunication operator or telecommunication network, shall be open without limitation to private investors including both domestic and foreign investors. The newly passed law enables foreign companies to invest in the telecommunications industry with no limit. This shows that the Government has decided to restructure the telecommunications market and introduce competition in the provision of telecommunications service. However, the law also stipulates that the number of such telecom operators entering into the market, the condition of the entrance and time for issuance of the licenses shall be determined by the government.
- Establishing an Independent Telecommunication regulator
Previously, the telecom sector was regulated by the Ministry of Communication and Information Technology (MCIT). MCIT had the power and duties to promote and monitor the expansion of communication services and the development of information technology in the country. MCIT was also authorized to issue license to businesses that invest in the telecom sector and to regulate telecommunication and postal service operators and infrastructure contractors. The Ministry also serves as the responsible body for verifying the competence of information technology professionals and entities.
Under the new proclamation an independent, transparent, and accountable regulatory Authority is established aimed at achieving “the government’s policy of restructuring the telecommunications market and introducing fair competition.” According to the new law, all telecom related regulation and monitoring is vested to the newly established The Ethiopian Communications Regulatory Authority.
“The Ethiopian Communications Regulatory Authority” as is referred in the new proclamation, is tasked, among others, “to implement policies for Communications Services; to regulate tariffs relating to Communications Service in accordance with the provisions of this Proclamation; as well as to license and supervise operators of Communications Service and modify, renew, suspend or revoke licenses.”
The regulatory Agency is also tasked with:
- Implementing policies for communications services.
- Reviewing and controlling tariffs of any licensed Telecommunications Operator and to develop Directives for setting tariffs in order to ensure that such tariffs are lawful.
- Determining, pronouncing upon, administering, monitoring and enforcing compliance of all persons with competition laws and directives, whether of a general or specific nature, as it relates to the Ethiopian telecommunications market.
- Determining technical standards regarding radio communications and Telecommunications Equipment including customer premises equipment.
- Regulating the control, planning, administration, management, and licensing of the radio frequency spectrum in Ethiopia for both commercial and government users.
- Protecting the interest of Ethiopia internationally, and shall be responsible for regional and global coordination of the use of radio frequency spectrum. and
The Ethiopian Communications Regulatory Authority will have “Board of Directors, a Director General, and a number of Deputy Directors General – as deemed necessary- and necessary staffs. The regulatory Agency will be accountable directly to the Prime Minister.
Other stipulations of the new law
The new law stipulates that it’s unlawful for any Telecommunications Operator to engage in any conduct that has the purpose of substantially lessening competition in any Ethiopian telecommunications market or to enter into an agreement or arrangement with any other person that has the purpose or effect of substantially lessening competition in any Ethiopian telecommunications market.
The new law also states that the Authority shall have the power to issue such Directives as it shall deem necessary in order to ensure that the interests of consumers of Communications Services are protected.
Confidentiality of customers’ data is also one of the stipulations of the new law. Telecommunications Operators shall take all reasonable steps to ensure the confidentiality of their customers’ Telecommunications. Telecom operators shall, however, permit duly authorized agents of the Government of Ethiopia to carry out lawful surveillance of Telecommunications in the conduct of a criminal investigation or national security investigation in accordance with the terms stipulated by a court of competent jurisdiction.
Telecommunication service equipment registration is also mandatory for selected items under the new law before them being put into use. The Authority will prepare a list of equipment that needs to be registered under the new law.
The new law also prohibits manufacture, import, or distribution of, Telecommunications Equipment without obtaining prior approval which requires the approval of the Authority. With the same token, no person is authorized to connect or disconnect Telecommunication Lines except for authorized employees of a Telecommunications Operator or a person licensed to do so by the Authority.