How ZTE & Huawei’s got the heart of Ethio Telecom

12 Apr

By correspondent Zhao Hejuan in South Africa, Ethiopia and Nigeria, and staff reporter Zhang Yuzhe

Just six years ago, Ethiopia was a battleground for telecom equipment suppliers. Telefonaktiebolaget LM Ericsson, Nokia Corp. and Siemens AG were among the western players. ZTE and Huawei were the Chinese contenders.
The battle was for a market comprised of fewer than 700,000 mobile phone users. And despite competition, telecom service prices were steep.

“Back then, a SIM card could go for up to US$ 100 on the black market,” Zhang Jinbao, director of ZTE’s technology center in Ethiopia, told Caixin. “You might not have been able to buy one even if you had the money.”

Changes began after the Ethiopian government embarked on a modernization project and sought bids from companies that could build a nationwide mobile network through government-owned ETC, the country’s only carrier. Western and Chinese companies participated in the tender, which ZTE won.

Tipping the scale in ZTE’s favor was CDB financial support for ETC. ZTE signed a four-year contract to build a backbone mobile phone network in 2006, and a year later CDB handed ETC a 13-year, US$ 1.5 billion loan to finance the project.
By the end of 2010, Ethiopia had 12 million mobile phone customers.

The tight money environment for western telecoms after the 2008 global financial crisis helped their Chinese competitors strengthen positions in Africa.

Read the rest on Caixin

%d bloggers like this: