A new filtering system that monitors the use of the Internet has also been installed by Ethiopian authorities in a move seen as targeting dissidents.
The telecoms law strictly prohibits VoIP (Voice over Internet Protocol) which includes audio and video related social media communication, and the transfer of information packages through the fast growing global cyber networks.
Inspection of any imports of voice communication equipment and accessories has also been authorised, while also banning inbound shipments without prior permission.
Anyone involved in “illegal” phone calling services will be prosecuted and could be jailed for up to 15 years or fined heavily if found guilty.
Making an Internet phone call through different software is punishable by three to eight years– automatically criminalising Skype and other similar voice services.
The government in the law’s introductory annex defends such legislation as a timely and appropriate response to the ever increasing security threats globally and in Ethiopia.
But observers say the law is aimed at further limiting freedom of expression and the flow of information in the nation of 85 million people.
In the last five years websites and blogs critical of the government have been frequently blocked and all Amharic language broadcasts targeting Ethiopia jammed.
Mr Alemayehu Fantaw, a Horn of Africa legal and crisis expert at New York City University, said: “VoIP differs from other forms of telecommunications with respect to confidentiality of the communication. This gives rise to a problem due to the existence of a constitutional right of anonymity and the protection of traffic data and content.”
Any attempt to ban social network media by a sub-Saharan Africa country including Ethiopia should be seen in the context of the Arab Spring uprisings in which such communication was vital in organising the protests, he added.