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The performance of international telecom companies that have huge market share in terms of supply and installing networks and telecom devises throughout the world has shrunk in the past year.
However Ericsson, Huawei and few other multinational companies have registered high performance in 2012. The company that registered the highest performance last year is the Swedish giant Ericsson, leading the sector in terms of revenue while the Chinese firm Huawei gained more in terms of net profit.
According to Huawei annual report, in 2012, it stepped up its investments in Europe. It invested more in the UK, established a new research and development center in Finland, and set up local boards of directors and advisory boards in France and the UK.
Huawei established Laboratories in 2012 with a focus on making continuous investments in key ICT fields. According to Huawei, it is dedicated to providing broader, smarter, and more energy-efficient pipes while working closely with partners from the industry, academia, and research institutes. “Our goal is to take the lead in research, innovation, and implementation of future networks,” the annual report states.
The telecom report in the past year indicated that most of the companies have registered very low performance compared with their previous year’s capability; however Ericsson and Huawei took the leading position in the ICT industry. Ericsson and Huawei are also leading the mobile field with more than 60 percent market share; while other vendors failed to grow. Huawei continued to strengthen the competitiveness of its service solutions. Over the past seven years, the annual growth rate of Huawei’s managed services exceeded 70 percent, making Huawei the fastest-growing services provider in the world. In the customer experience management field, the Huawei SmartCare CEM solution was extended from Per Service Per User Service Quality Management to holistic customer experience management and continued to strengthen its leadership in the industry.
The performance and strength of Huawei, which is one of the two Chinese firms that will handle the coming expansion project in Ethiopia, is good news for Ethiopia.
The company also announced recently that it has a plan to participate in the IT Park which Ethiopia is going to set up in the near future. A good opportunity it said for knowledge transfer and to make capable and competitive young Ethiopian professionals.
The telecom firm with 150,000 employees is also leading in the invention of new technologies on the sector and its products are becoming a competing brand around the world.
“Obtaining benefits from one source’ is a principle which places focus on high-performing employees, and guides us to adjust internal relationships and determine who we count on for corporate development,” Guo Ping, Rotating and Acting CEO of Huawei, is quoted as saying on the annual report.
According to the report released two weeks back Huawei registered 35.4 billion dollar revenue in 2012. It registered 32.4 billion dollar revenue in the 2011 performance year.
The report also indicated that the Chinese giant expects to undertake part of the telecom expansion in Ethiopia.
The other firm that registered tremendous performance in the past year was Ericsson, which was one of the companies that were on the vendor list to handle the expansion project in the country. Ericsson registered 35.8 billion dollar revenue in the 2012 report year. But in terms of profit the Swedish giant has registered lower than the Chinese firm. Ericsson collected 947 million dollar as profit in the 2012 report, a sharp decrease when compared to the 1.8 billion dollar net profit in the year 2011.
2012 was not a marvellous year for most of the telecom firm except the stated two firms. Most of the other giants have registered lower performance especially in terms of revenue compared with 2011 report. Some of the international telecom companies have in fact registered loss compared with the previous year.
The Ethiopian market
Technologically-speaking, ICT innovations mainly fall into five groups: mobility, broadband interconnectivity, social networking, cloud computing, and big data processing. The objective of these innovations is to transform the physical world into a smart world underpinned by smart ICT infrastructure, making the latter key to advancing information-based development.
The Ethiopian telecom industry especially the mobile service highly grows in the past few years after the accomplishment of the 1.5 billion dollar expansion project a few years ago.
Eventhough the sector registered high growth, the market still needs more expansion and the government has targeted to expand the mobile subscription from the current 20 million to 50 million by the end of the Growth and Transformation Plan (GTP) that will end in mid 2015.
Though the project is not commenced, the government has already selected two Chinese telecom firms to undertake the new 1.3 billion dollar project.
Meanwhile, the recently released World Bank report indicated that the telecom project in Ethiopia is highly exposed to corruption, however the report did not raise any specific issue.
Debre Tsion Gebre Michael (PhD), Minister of Communication and Information Technology, recently told Capital that the sector is highly risky in term of corruption and misdemeanour. He said that this kind of huge projects need close attention by the government.
According to the 2012 telecom report most of the giant telecom firms including the companies that were on vendor financing bid for the ethio telecom new expansion project have registered loss. “While the telecom industry was not successful in the international market, the companies that are involved in huge projects in the developing countries have good opportunities to going strongly in the sector,” representative of the international telecom companies said recently on a meeting held in Addis Ababa.
According to experts, as the international trend, telecom companies are expected to give some free offer related with the sector. “For instance they have to freely swap or optimize the oldest telecom networks that were giving service for long years,” experts added.