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Telecom Expansion Project Taking Shape

Published on: Sat, 2013-11-30 00:00
Image showing Ethio telecom logo

Ethio Telecom has concluded the task of telecom vendor allocation and proceeded to the launch of the telecom expansion project to realize the government’s Growth and Transformation Plan (GTP) for the sector in the remaining two years.

Abdurahim Ahmed, corporate communications director for Ethio Telecom, told journalists at a press conference on Thursday that the long awaited allocation of the projects between Huawei and ZTE, the two Chinese telecom giants, was finalized on Wednesday,a few months after the state-run telecoms operator separately signed USD 1.6 billion agreements with the two rival firms.

In July this year Ethio Telecom’s board chairman, Debretsion Gebremichael (Ph.D.), who is also the Deputy Prime Minister and Minister of Information and Communication, announced that Addis Ababa’s expansion project was fully awarded to Huawei. However, Huawei and ZTE later indicated that negotiations were ongoing and both parties had not formally been notified. At the same time, both companies stated a strong desire to win the Addis Ababa 4G contract, which emerged as the priority project among the multi-billion dollar expansion.

The original USD 1.6 billion deal signed by Ethio Telecom was reportedly part of the government’s multi-vendor market sharing strategy, with each company assigned a 50 percent share, i.e. USD 800 million.

Among various targets, the project expansion is aimed at increasing the mobile service capacity from the present 24 million to 59 million, and the implementation in Addis Ababa of Fourth Generation (4G) or Long Term Evolution (LTE) technology. Through this contract the country’s telecom network coverage will reach 85 percent.

The Ethio Telecom management board approved the proposal of 13 telecom circle allocation for the two Chinese telecom vendors in order to enable the project’s efficient implementation and considering the government’s direction of allocating the country’s geographical coverage of telecom sector vendors.

The two vendors are sharing allocation of the 13 telecom sectors, including Addis Ababa city.

According to Abdurahim, the decision by the established technical team was based on seven criteria, along with 17 additional considerations. The 4G network and mobile expansion project has been fully granted to Huawei, as originally announced, with the implementation expected to be completed within eight months, despite the extensive road and railway construction.

“In terms of the allocation, Huawei will be responsible for the expansion of 4G in Addis Ababa, including mobile services,” Abdurahim told the press conference
Local media recently reported that the Ethiopian Revenues and Customs Authority (ERCA) confiscated USD 13 million worth of equipment imported in late 2012 by Huawei Technologies, adding that the equipment was allegedly imported in the name of Ethio Telecom without its knowledge.

It was reportedly said that the confiscation was made following successive investigations by the Ethiopian Shipping and Logistics Service Enterprise (ESLSE), Ethiopian Cargo (ET Cargo) and the House of Peoples’ Representatives (HPR).

According to the report, the investigation concluded that the company had imported the equipment on behalf of Ethio Telecom, nine months before it had signed the USD 800 million expansion deal.

It remains unclear whether the government will bring formal charges against Huawei regarding the alleged illegal import. For its part, Ethio Telecom deny ownership or the order to purchase the equipment.

Responding to questions by The Reporter regarding the controversy, Abdurahim said: “It’s not appropriate for us to comment on the imported equipment issue as the matter is being handled in a legal way. But the equipment neither belonged to Ethio Telecom, nor did we make any purchase.”

Abdurahim added that his firm was unaware of the issue until they heard about it from a third party. Though the director claimed not know about the “illegally-imported equipment”, he indicated that “the equipment was not imported for the newly launched expansion projects”.
Source: The Reporter

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