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The Ministry of Communications and Information Technology (MoCIT) is expected to award a contract for a $1.3 billion
telecom expansion project to two Chinese companies in the coming few weeks.
The launch of the vendor financing scheme to be undertaken by Huawei and ZTE has been delayed for almost a year, after the government chose the successful bidders.
Debretsion Gebremichael, Deputy Prime Minister for economic cluster and Minister of MoCIT, explained that the government has been evaluating and holding negotiations with the two bid winners.
At the 9th Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF) congress – held in Bahir Dar in March – the Minister said work on the expansion project is expected to start soon.
The project’s aim is to provide mobile service to 40 million subscribers.
Sources say the expansion project will be officially announced before the Ethiopian New Year.
According to the original plan, the expansion project is part of the government’s five-year development plans that will conclude next fiscal year (2014/15).
Sources said the delay is mainly related to the sharing of projects and sites for the two Chinese telecom giants.
It is believed that the biggest part of the project will be managed by Huawei, the biggest telecom firm in the world in terms of profit, but this has not been confirmed by government officials.
The Chinese telecom giant, which amassed a 2.4 billion dollar profit, according to Fortune 500, will be involved telecoms project in Ethiopia.
The expansion project will upgrade several telecoms systems and expand coverage dramatically, allowing the number of mobile users to double from the current 20 million.
According to sources, the new expansion would include long-term evolution (LTE), broadband technology to access via cell phones and hand held devices, for Addis Ababa and HSPA+, an advanced version of 3G technology, for major cities.
According to sources, there is not clear information about which one of the two companies will undertake the project in the capital.
ZTE, the second biggest telecom firm in China, undertook the previous $1.5 billion telecom expansion, which concluded in 2009.
In an unrelated development, the country’s sole telecom provider, Ethio Telecom, has appointed its first Ethiopian chief executive officer since the government outsourced the management of the company to France Telecom (Orange) two and half years ago. Even though Orange’s contract ended in December 2012, Bruno Duthoit, CEO of ET, appointed by Orange, was in the post until the end of the past fiscal year.
According to sources at ET, Andualem Admasse, former head of finance and human resources, has taken over the lead as CEO for ET.
According to sources, the new CEO joined ET on the management transition period for the European telecom firm in 2010.
Amare Amssalu was the last Ethiopian CEO for the telecom enterprise before Orange took control of the management.