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In the contemporary world, information and communication technologies are powerful instruments in accelerating economic development through production, distribution and exchange of market information in business operation as well as trade and consumption patterns among enterprises and consumers. Therefore, The study primarily aimed to investigate and assess the economic role of ICTs and its challenges in the case of Tarcha town by deploying ICT user economic development oriented private business enterprises. Findings of the study indicated that, the role of ICTs services on enhancement of economic development in terms of income growth, creation of employment opportunity, productive efficiency and creation of market opportunity was moderate. More over, the paper has clearly indicated that, the use of the selected ICTs services were positively and significantly correlated with the core economic development predicting variables. How ever, challenges like inadequate supply coupled with poor quality of ICTs service provision, ill functioning of telecommunication sector at the local level, less collaboration of Ethiopian Telecommunication Corporation (ETC) with the local government.

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