Predictors of Growth of Teledensity in Ethiopian Telecommunications Corporation

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Addis Abeba university


The Ethiopian Telecommunications Corporation is the sole provider of national and international telecommunications in Ethiopia since 1894. In Ethiopia, teledensity grew so slowly, as compared to developed countries or other developing countries. This study uses 31 years of yearly data starting from the beginning of 1970 in Ethiopian fiscal year. The problems and strategic actions for growth in teledensity are discussed. Also, the opportunities for utilizing information and communication technologies to solve priority problems and to realize sustainable development in the country are examined. Parametric (Cochrane‐Orcutt) and nonparametric (lowess) multiple regression models are employed. Specifically, the findings of the parametric regression model based on Cochran‐Orcutt transformation to handle serial correlation of residuals suggest that major determinant for growth of teledensity are higher GDPC and higher contribution of the service sector share to GDP in Ethiopia. And the average revenue generated by each telephone line (average used charge) is negatively related to teledensity in Ethiopia. In addition, the non parametric regression based on lowess method fitted the teledensity data equally as good as the parametric method