Ethiopia says Ericsson to take part of telecom deal after ZTE row

by Zelalem

ADDIS ABABA Dec 11 (Reuters) – Swedish telecom group
Ericsson is set to sign a contract with Ethiopia to expand
telecom infrastructure, taking a slice of an $800 million
contract from Chinese firm ZTE Corp because of a row over terms,
a senior official told Reuters on Thursday.

ZTE Corp’s deal with state-run operator Ethio
Telecom was signed in 2013. The other half of the overall a $1.6
billion package to help double mobile subscribers was shared
with another Chinese firm, Huawei Technologies Co Ltd.

But Ethiopian and ZTE differed over the cost of upgrading an
existing network. Ethiopian officials said the firms were
expected to carry out the upgrade at no extra charge, while ZTE
said it would cost an additional $150 million to $200 million.

Ethiopian officials had said Nokia and Ericsson
could take some work if agreement was not reached.

Ethio Telecom Chief Executive Andualem Admassie told Reuters
that discussions with Ericsson were nearing completion.

“Ericsson will start working on that share of expansion
work,” he said, without giving a value for the deal. “We are
only waiting for confirmation from the (Ethio Telecom) board.”

“Huawei is continuing its role,” he said, adding that ZTE
would continue with some work. “ZTE have lost parts of their
share but have made it clear they are willing to resume work, no
matter what the current circumstances.”

Ericsson could not immediately be reached for comment.

The overall project aims to help the nation of more than 90
million people double mobile subscribers to 50 million in the
next year and expand its 3G service.

The overall contract also includes a plan for Huawei to roll
out a high-speed 4G network in Addis Ababa.

China has extended its economic influence in Africa in
recent years, with state-owned firms winning road tenders in
Kenya, signing deals for construction of energy projects in
Uganda and running mining projects in various countries.

The $1.6 billion contract signed with the Chinese firms in
Ethiopia had a long-term loan package to be paid over a 13-year
period with interest of less than 1 percent, officials said.

(Reporting by Aaron Maasho; Writing by Edmund Blair; Editing by
Mark Potter)

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