Telecom Deal by China's ZTE, Huawei in Ethiopia Faces Criticism
For Ethiopians, a Chinese Telecom Project Changes Lives but Draws Scrutiny
Published in The Wall Street Journal
By MATTHEW DALTON
LAKE WENCHI, Ethiopia—In the green highlands here southwest of Addis Ababa, farmers like Darara Baysa are proud owners of cellphones that run on a network built by China's ZTE Corp.
The trouble is, they have to walk several miles to get a good signal. "The network doesn't work well," says Mr. Baysa, a former army sergeant, stopping on the unpaved road near his home to show his hot-pink smartphone.
Among other troubles: Ethiopian government officials have in recent years complained to ZTE that the company's contract for building the network requires Ethiopia to pay too much, say people familiar with the discussions.
The Ethiopian network's glitches underline the broader troubles that sometimes face poorer nations as they borrow heavily to invest in telecommunications, roads, utilities and other infrastructure to help lift them out of poverty.
China's financial firepower helps its firms win many of these contracts. But in agreeing to such deals, some governments appear to have flouted rules meant to foster sound public investment. When countries sidestep such rules, say experts at institutions such as the World Bank, big projects often cost more and are more likely to be poorly executed.
China's Huawei to roll out 4G service in Ethiopian capital
BY AARON MAASHO
(Reuters) - Ethiopia's state-run Ethio Telecom said on Thursday it had picked Huawei Technologies Co Ltd, the world's second largest telecom equipment maker, to roll out a high-speed 4G network across the capital Addis Ababa.
The introduction of the service is part of a $1.6 billion deal signed in July and August between the Ethiopian firm, Huawei and ZTE, China's second-biggest telecoms equipment maker, to expand mobile phone infrastructure throughout the Horn of Africa country.
"In terms of allocation, Huawei will be responsible for the expansion of 4G in Addis Ababa, including other mobile services - the 2G, 3G, IP and the like," Abdurahim Ahmed, Ethio Telecom's head of communications, told Reuters.
Abdurahim said the allocation plan was finalized on Wednesday.
"It is expected to benefit more than 400,000 subscribers. Within an eight-month period, the expansion project of Addis Ababa, including 4G, will be completed."
The deal, signed by ZTE in August and Huawei a month before, will enable Ethiopia to double subscribers to more than 50 million by 2015 and expand 3G service throughout the country.
Both firms will split their work along 13 expansion areas.
The contract was awarded under a long-term loan package to be paid over a 13-year period with an interest rate of "less than 1 percent", Abdurahim said.
Africa's rapidly expanding telecoms industry has come to symbolize its economic growth, with subscribers across the continent totaling almost 650 million last year, up from just 25 million in 2001, according to the World Bank.
Ethio Telecom is the only mobile operator in the country of more than 80 million people, among the last remaining countries on the continent to maintain a state monopoly in telecoms.
The government has ruled out liberalizing its telecoms sector, saying the 6 billion birr ($321 million) it generates each year is being spent on railway projects. Ethiopia plans to build 5,000 km of railway lines by 2020.
Ethiopia signs $800 mln mobile network deal with China's ZTE
By Aaron Maasho
ADDIS ABABA, Aug 18 (Reuters) - Ethiopia signed an $800 million deal with China's ZTE on Sunday to expand mobile phone infrastructure and introduce a high-speed 4G broadband network in the capital Addis Ababa and a 3G service throughout the rest of the country.
The agreement with ZTE, China's second-largest telecoms equipment maker, is half of a $1.6 billion project split with Huawei Technologies Co Ltd, the world's second largest telecom equipment maker. Huawei signed the agreement last month.
Both firms will provide low interest loans to Ethiopia through an arrangement known as vendor financing, Ethiopian officials and both firms said.
Africa's rapidly expanding telecoms industry has come to symbolise its economic growth, with subscribers across the continent totalling almost 650 million last year, up from just 25 million in 2001, according to the World Bank.
Ethiopia signs $700 mn mobile network deal with China's Huawei
ADDIS ABABA: Ethiopia on Thursday signed a $700 million agreement with China's Huawei Technologies Co Ltd to expand mobile phone infrastructure and introduce high-speed 4G broadband network in the capital Addis Ababa and 3G service throughout the country.
Huawei, the world's second largest telecom equipment maker, has been involved in developing phone and internet services in the Horn of Africa country for several years.
Africa's rapidly expanding telecoms industry has come to symbolize its economic growth, with subscribers across the continent totalling almost 650 million last year, up from just 25 million in 2001, according to the World Bank.
Andualem Admassie, acting chief executive officer of state-run Ethio Telecom, and Jony Duon, his counterpart at the Chinese firm, signed the agreement that will double subscribers to 56 million.
"Although our target is 40 million, now including 3G it will 56 million by 2015. That would be the capacity," said Debretsion Gebremichael, Ethiopia's deputy prime minister and minister of communications and technology.
The agreement is half of a $1.6 billion project split between Huawei and ZTE, China's second-largest telecoms equipment maker. Both firms will finance the amount. Ethiopia will sign the other half of the agreement next week, Debretsion said.
Ethio Telecom is the only mobile operator in the country of more than 80 million people, one of the last remaining countries on the continent to maintain a state monopoly in telecoms.
Although lacking much of a telecoms industry, the government last year gave approval for private companies to provide value-added services - all services other than standard voice calls.
Ethiopia's ministry of communications and information technology says it has received applications from 218 firms to provide such services. South Africa's MTN Group, Africa's largest mobile phone company, has already been granted a licence.
The government has ruled out liberalising its telecom sector saying the six billion birr ($321 million) it generates each year is being spent on railway projects. Ethiopia plans to build 5,000 km of railway lines by 2020.
Ethiopia's tech hopefuls
By Jonathan Kalan
Addis Ababa, Ethiopia
When it comes to technology and innovation, Ethiopia appears a long way away from the rest of Africa's rising "silicon savannahs."
The most advanced form of banking in Africa's second most populous country is an ATM - there are no credit cards and no international banking systems.
This makes app stores like Google Play and Apple's Appstore inaccessible.
Mobile money, which has taken off places like Kenya, has only just arrived, but with significant limitations.
Skype and other VoIP (voice over internet protocol) services are banned for business purposes.
With a lumbering government-owned telecoms monopoly, staggeringly low internet penetration (less than 1% of Ethiopia's 85m citizens are connected), just 17% mobile penetration, and a very "security conscious" government approach to new technology and services, it's not the most encouraging environment for small technology start-ups to grow.