Br 68.8 (birr of 2015), while new entrants in the bottom consumption decile will gain an average of Br 2.9. This translates into a relative gain of 0.25 percent among the top decile and 0.09 percent among the bottom decile. New entrants in the top decile will also benefit more than new entrants in the bottom decile, but less than proportionately in the case of the relative welfare gains among current consumers.

**Table 6. Welfare Effects, Loss of Ethio Telecom Monopoly, New Users**

|_Consumption value_|_All_|_Poorest_<br>_1_|_2_|_3_|_Co_<br>_4_|_nsumption d_<br>_5_|_ecile_<br>_6_|_7_|_8_|_9_|_Richest_<br>_10_|
|---|---|---|---|---|---|---|---|---|---|---|---|
|Annual mean per capita<br>consumption, birr|10,111|3,062|4,775|5,928|6,908|7,867|8,806|9,851|11,621|14,779|27,525|
|Absolute incidence, birr|28.2|2.9|10.7|15.1|17.3|21.8|17.8|24.8|42.1|60.4|68.8|
|Relative incidence|0.28|0.09|0.22|0.25|0.25|0.28|0.20|0.25|0.36|0.41|0.25|

_Source:_ Elaboration based on data derived from the WELCOM Stata Tool and the 2015/16 HCES; see CSA 2018. _Note:_ Consumption values are in birr of 2015.

Despite the positive but unequalizing welfare effects of greater competition on new users, an accounting of only the welfare effects on new users shows that the relative welfare gain among households in the bottom decile of the consumption distribution is 6.9 percent, compared with an average of 4.9 percent among households in the richest decile (figure 3).

**Figure 3. Relative Welfare Gains of Greater Competition in Telecommunication, New Users**

<!-- Start of picture text --> 8.0%<br>7.0%<br>6.0%<br>5.0%<br>4.0%<br>3.0%<br>2.0%<br>1.0%<br>0.0%<br>1 2 3 4 5 6 7 8 9 10<br>Consumption decile<br>incidence (percent)<br>Relative welfare monetary<br><!-- End of picture text --> _Source:_ Elaboration based on data derived from the WELCOM Stata Tool and the 2015/16 HCES; see CSA 2018. _Note:_ Bars show relative welfare in percentage. Relative welfare is the per capita welfare incidence divided by per capita expenditure, only for new consumers. Expenditure estimates were carried out by running a quantile regression model and random imputation of residuals.

# **4.3. Aggregate welfare effects of greater competition in the ICT industry**

Next, the results obtained above among both current and new users, except for the Gini index, can be added linearly to calculate the aggregate welfare effects of the breakup of the monopoly power of Ethio Telecom. Thus, the relative mean aggregate welfare gains among current and new users are equivalent to 1.37 percent. Richer households in higher consumption deciles would also experience

> imputation of residuals. using the average expenditures among primary sampling units, which give the most conservative estimates. Hot deck random imputation was also carried out to estimate expenditure; this could serve as an upper-bound estimate. Other expenditure imputation models are linear regression imputation, stochastic regression imputation, quantile regression imputation, and quantile regression with random imputation of residuals. See the mcema user manual for more information on each methodology (RodríguezCastelán et al. 2021). The relative impact on welfare is the average absolute impact on the average income, times 100.

14