Ericsson to step in following Ethiopia-ZTE fall out?

12 Dec 2014

Sweden’s Ericsson looks poised to step in and save Ethiopia’s proposed telecoms expansion project, taking on a sizeable portion of a USD800 million contract initially earmarked for ZTE Corp of China after a fallout between Addis Ababa and Beijing over the terms of the deal. A senior Ericsson official told Reuters that both sides have fallen out over the cost of upgrading an existing network, with Ethiopian officials arguing that the vendors agreed to carry out the upgrade at no extra charge, after ZTE placed an additional USD150 million-USD200 million fee on its original costings. ZTE’s deal with state-run operator Ethio Telecom was inked in 2013 – one-half of the overall a USD1.6 billion package designed to double the African carrier’s mobile subscriber base – with the other half taken by another Chinese firm, Huawei Technologies.

Ethio Telecom CEO Andualem Admassie has confirmed that negotiation with discussions are nearing completion. ‘Ericsson will start working on that share of expansion work,’ Admassie said, adding that the deal now needs confirmation from the Ethio Telecom board. The chief executive went on to say that ZTE is not entirely excluded from the deal. ‘ZTE has lost parts of its share but have made it clear it is willing to resume work, no matter what the current circumstances.’

The massive project is aimed at boosting mobile take-up to 50 million in a country totally 90 million over the next year, expand Ethio Telecom’s 3G services, and to roll out a 4G network in Addis Ababa.

Ethiopia, Ericsson, Ethio Telecom, ZTE