Ethiopia Seeks Tech Companies to Share Chinese Mobile Contract

by Zelalem

Ethiopia will give other companies
parts of a telecommunications project it awarded to ZTE Corp. (000063)
after a contract dispute with the state-owned Chinese company,
Communications and Information Technology Minister Debretsion Gebremichael said.

The government has held talks with Helsinki-based Nokia Oyj (NOK1V)
and Ericsson AB of Sweden about them taking over segments of the
contract, which seeks to double mobile-phone network capacity in
the Horn of African country and expand 3G coverage nationwide by
June, Debretsion said.

“We’ve already started negotiations with Ericsson and
Nokia,” he said by phone yesterday from the capital, Addis
Ababa. “We didn’t sign as we have to close the issue with ZTE
before getting into any other major contractual agreement.”

Neither ZTE nor Nokia immediately responded to e-mails
seeking comment. Ericsson doesn’t comment on “rumors or
speculations,” spokeswoman Elisabeth Mansi said by e-mail.

Ethio Telecom, the state-owned monopoly provider, in July
2013 signed deals worth $1.6 billion with ZTE and China’s Huawei
Technologies Co. to improve Internet and phone services. In line
with a previous ZTE contract, the companies agreed to provide
most of the financing themselves from Chinese lenders.

ZTE’s work has been delayed by at least six months after it
rejected a “mandatory” provision to upgrade existing
infrastructure at no extra cost as it expanded networks,
Debretsion said. Although the company has now agreed to the
condition, other firms need to be involved to make up for lost
time, he said.

Completing Work

ZTE “will not be the only one to complete the remaining
work that is apportioned to them,” Debretsion said.

About 27 percent of Ethiopia’s 90 million people had
mobile-phone subscriptions in 2013, compared to 71 percent in
neighboring Kenya, according to International Telecommunications
Union data. The percentage of Internet users in Ethiopia,
Africa’s second-most populous nation after Nigeria, was 2
percent last year, while in Sudan, another neighbor, it was 23

The government says it retains control of
telecommunications to ensure investment is focused on extending
basic services to rural areas and because it needs the revenue
to build infrastructure.

Ethiopian officials have talked to Ericsson and Nokia about
how they would “fit into the gaps we have” and told them they
would need to access financing, Debretsion said.

To contact the reporter on this story:
William Davison in Addis Ababa at

To contact the editors responsible for this story:
Paul Richardson at
Michael Gunn, Sarah McGregor, John Bowker

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