Chinese telecom giants to boost the telecom sector


A recent decision by Ethio-Telecom to award its upcoming multibillion dollar expansion project to competing Chinese telecom giants may lead to better service delivery by the state monopoly, sector experts and telecom users  informed Capital.
According to these observers and users, Ethio-Telecom’s decision to move from a single supplier dependency to what they called a wise approach of bringing both Huawei and ZTE, the largest telecom firms in the globe, on board its upcoming expansion project would create opportunities to resolve the service quality problems that has gone unaddressed for years. Recent reports  indicated that Ethiopia’s government will sign a two-year contract with Huawei Technologies Co. and ZTE within weeks.
China’s top telecom and ICT solutions provider and a global industry leader  Huawei, and its closest competitor  ZTE (maker of phone equipment) were neck and  neck for months to grab Ethiopia’s  telecommunications contract which is worth 1.3 bln dollars.
“We will be engaging the services of   both companies,” Debretsion Gebremichael, Communication and Information Technology Minister,  informed Bloomberg news last week. “Both will have a share in the market.”
This multi-vendor strategy will benefit Ethio-Telecom, its clients and speed up the growth of the telecom sector in Ethiopia, said the industry observers and ordinary telecom users Capital spoke to.
“By employing a multi-vendor strategy, the government is bringing a much needed sense of competition  to the industry that I believe will bring advanced telecom technologies, lower prices and more options,” stated Berihun G. Ayana, a returnee from Minnesota with a decade of experience in the US telecom industry.     
The privately owned Huawei  claims that it  will introduce cutting-edge telecom and ICT technologies to one of Africa’s most populated countries  with a low level of phone and internet penetration.   The mainly state-owned ZTE has been working  with Ethiopia’s state-owned telecom provider for over  six years. Though the multi-billion birr project ZTE has implemented for years has improved the penetration of phone and Internet services across the country, the inconsistent quality of the service characterized by poor phone networks and internet connectivity has exposed both the state monopoly and its single supplier to a barrage of criticisms.
Previously the world’s second-largest equipment manufacturer, Huawei’s latest earnings have, for the first time, surpassed those of the giant  Swedish telecom player, Ericsson.
“I hope the competition between Huawei  and ZTE  will bring us better telecom services and that they will emerge as favoured suppliers for future projects,” Berihun added. 
The two companies will  finance  the project which will provide services to 50 million mobile phone users by mid 2015, more than doubling the number of users which now stands at 20 million.
“We are not directly financing this expansion but have  invited  interested parties to come up with the finance,”  Debretsion was quoted as saying. 
Agreements including technical details and how to divide the work between the companies are expected to be reached within two weeks.
Internet -addicted youth in Addis Ababa, like Mohammed  Abdela, share Berihun’s belief that the competitive strategy could result in better service and lower cost.
“This  will increase the  quality of service and will also introduce new network technologies,  such as 3G and 4G, that are available  in other countries, decrease the price of the services and avoid  network failures,” Mohammed,  who regularly travels to Dubai and China for business, told Capital. “Whenever I return to Addis after travelling for a few weeks in places which have  superb internet and phone service,  I get frustrated with the poor quality of service here. I hope this will end soon and hope that we will enjoy excellent  internet and phone  services.”
Mohammed’s friends who spend hours glued to their iPads at Kabu Coffee, a luxury café on the road to Atlas Hotel with free wifi service, seem reserved about how much change the upcoming project will bring. Nevertheless, they don’t  rule out the possibility that the future of Ethiopia’s telecom industry, with Huawei and ZTE standing as competing suppliers, will see advanced technology, better communication quality and lower prices.