Global Mobile phone access: Ethiopia at the bottom

Ethiopian telephone telephone tariff is the cheapest in East Africa, Ethio-Telecom CEO Jean-Michel Latute noted in the press conference last January held at Sheraton Addis. That was when he announced the notable, albeit insufficient, tariff reductions, the first commercial move of Ethio-Telecom since France-Telecom took the management for two years.

Mr. Latute had the decency not to claim the tariff is the lowest in Africa, as his predecessors used to say, presumably, comparing the rates after simply converting them to US Dollars.

That is as fallacious as saying – Ethiopians pay less than Americans for a cup of coffee – as they can buy for Birr 5, while most Americans pay more than 2 USD(Birr 33 at current exchange rates).

Any such comparison is meaningless without taking income level, especially market value of the money, of the respective country into consideration. That is the concept behind PPP(Purchasing Price Parity). 

One writer recently noted, in an article unrelated to Ethiopia, that ‘in Kenya today, a SIM card costs less than a beer’. I am not sure about the type of beer and selling place the writer considered. But that doesn’t matter.

As the cost of mobile subscription in Ethiopia stands at Birr 60(reduced from Birr 135 last month). That is the amount the Ethiopian middle class pay for three Beers at a decent night club.

It is no wonder then, Ethiopia is at the bottom of the list in the mobile phone penetration rate.

A comprehensive study by the International Telecommunication Union(ITU), scheduled for next September, is expected to further attest the exorbitantness Ethiopia’s telephone tariff.

For now, here is the Mobile phone subscriptions of 114 countries, which ITU published in 2010 – based on 2009 data.

With only 5 out of 100 subscribed, Ethiopia stands only second to Eritrea – a virtually failed state with a military expenditure as big as 25% her GDP – which is not worth comparing anyway.

Of course, the list is not complete, it leaves out about 100 more countries globally and about 20 African countries. Yet, at least half of the African countries omitted in the list – inc. Kenya, South Africa, Uganda and Rwanda – have a subscription rate far better than Ethiopia.

Mobile (cellular) phone subscriptions(per 100 population)