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Ericsson hopes to get new contract
ZTE’s loss is apparently Ericsson’s gain as ethio telecom is set to award part of the expansion project originally intended for the Chinese company to the Swedish telecom giant Ericsson.
This has come about as a result of ZTE not starting their part of an expansion project for over a year. It was part of a 50/50 deal with Huawei Technology for a country wide project but only Huawei commenced the expansion project.
After ZTE failed to start the project, ethio telecom wrote a letter of warning, however no progress was made.
A week ago Capital reported that Ericsson, who introduced mobile technology in the early 2000s to the country, was in negotiations with the state telecom enterprise to be part of the current big expansion expected to be completed by the end of this fiscal year.
Sources told Capital that Ericsson will handle the expansion project that was allotted for ZTE. Meanwhile Huawei, which has almost finished the 4G telecom expansion in the capital city, will continue based on the original deal.
Other sources also stated that the state monopoly is considering claiming compensation for damage because of the ZTE’s delay in starting the project on schedule.
Andualem Admasse, CEO of ethio telecom, declined to comment about the issue.
Meanwhile sources stated that the government will transfer the ZTE contract to Ericsson if the negotiation is fruitful however, ZTE officials who responded to Capital’s questions via email stated that they are still in discussions with ethio telecom about commencing the expansion project.
“We are negotiating on a specific commercial contract (SCC) based on the signed frame agreement,” ZTE explained.
ZTE further stated that the expansion couldn’t begin on time because the SCC was not finalized. They say that there are many other reasons for the delay but ZTE cannot disclose them because of a signed NDA (non disclosure agreement) with the customer, ethio telecom.
The current vendor financing expansion project is worth USD 1.6 billion. ZTE has undertaken the previous expansion project which was finalized in 2010 at the total cost of USD 1.5 billion.
Currently, ethio telecom is testing the 4G data network. Sources said that the enterprise is expected to make 4G Internet available for interested consumers before the end of the fiscal year.