Ericsson network expansion contract revoked, awarded to Huawei


Ethio Telecom has revoked one of the four telecom expansion circles it awarded to Ericsson seven months after signing a contract. Huawei, the Chinese telecom giant, has been awarded the project.
Ericsson was contracted in December 2014 to undertake four of the six expansion circles that were formerly awarded to the other Chinese telecom  heavyweight ZTE Corporation approximately two years ago, after Ethio Telecom and ZTE failed to reach an agreement.
Ethio telecom, the country’s sole telecom provider, was reportedly disappointed by Ericsson’s weak performance in the last seven months. According to the agreement, Ericsson was supposed to complete the project in June 2015.“Still, Ericsson itself is unable to commit to the framework it agreed to,” sources noted.
Ericsson reportedly requires seven more months to finalize the project.
The expansion plan, which involved extensive negotiations with ZTE and Huawei Technology Co. Ltd, was expected to be completed by the end of GTP I.
The negotiation process, which took over two years, was the main reason for delays. However, upon signing a USD 1.6 billion deal two years ago, the two companies agreed to meet the GTP I deadline.
Andualem Admassie, CEO of Ethio Telecom, told Capital that Ericsson has not met the deadlines outlined in its contract. “We should not have to wait further for the company to meet its deadlines. Ericsson has to finish as soon as possible,” the CEO said.
Huawei has already been awarded the circle that was taken away from Ericsson. “This circle is in the south south-western region that includes Arba Minch, Welayta Sodo and other nearby towns. The expansion project in the region will have a total capacity of 6.51 million customers,” Andualem told Capital.
“Huawei has completed 100 percent of its renovation projects and 95 percent of new network expansion. The remaining five percent are projects in remote areas such as borders and mountains. Those projects require helicopter support,” Andualem said.
Huawei was awarded six expansion circles, including the Addis Ababa project that includes developing 4G  internet service. Andualem said that the government will take measures against the European firm unless it expedites its projects.
Ericsson introduced mobile network in the country. It has had a historical presence in the Ethiopian telecom service dating back to the first phone during Emperor Menelik II. ZTE also undertook an expansion project worth more than USD 1.5 billion, which it completed about five years ago.