This diagnosis and advocacy policy notehighlights key issues in the Djiboutian telecommunicationssector and suggests possible recommendations for policy andregulatory reform. In Djibouti the sector is fullyvertically integrated and the monopolistic position ofDjibouti Telecom on the whole market drives thetelecommunication sector to global inefficiencies, impactingthe whole social welfare. The note identifies the keyoperational, regulatory and policy challenges and arguesthat, in persisting with those identified bottlenecks thecountry would simply trigger a fiscal and economicopportunity cost expected to dramatically impede thedevelopment of the sector, and jeopardize the expecteddevelopmental impacts of major infrastructure projectscurrently initiated. Strategic and Policy recommendations tomitigate the opportunity cost of status quo are eventuallyproposed. Among the reforms proposed were proposing choicesthe reform could take, reinforcing the regulatory body ofthe Ministry of Communication, and creating an IXP and a POPto leverage the impacts of fiber optic projects and makeDjibouti an international ICT Gateway.