Ethiopia Signed $700 Million-Deal With China’s Huawei

Ethiopia Signed $700 Million-Deal With China’s Huawei

China has made yet another major deal in Africa. This time, with Ethiopia.  China’s Huawei Technologies signed a $700-million agreement with Ethiopia to expand mobile phone infrastructure and introduce high-speed 4G broadband network in the capital Addis Ababa and 3G service throughout the country, reports  Independent Online.

It’s not Huawei’s first deal in Africa. The world’s second largest telecom equipment maker, has actually been involved in developing phone and Internet services in the Horn of Africa country for many years.

Africa’s telecoms industry has been expanding rapidly; subscribers across the continent reached nearly 650 million last year, a great increase from just 25 million in 2001, according to the World Bank.

Andualem Admassie, acting chief executive officer of state-run Ethio Telecom, and Huawei’s Jony Duon signed the agreement that is expected to double subscribers to 56 million.

“Although our target is 40 million, now including 3G it will 56 million by 2015. That would be the capacity,” said Debretsion Gebremichael, Ethiopia’s deputy prime minister and minister of communications and technology, in a press statement

Under the agreement, the $1.6-billion project will be split evenly between Huawei and ZTE, China’s second-largest telecoms equipment maker. Both will finance the project.

Currently, Ethio Telecom is the only mobile operator in the country, which is one of the last remaining countries in Africa to maintain a state monopoly in telecoms. The government says it will now liberalize its telecom sector as the six billion birr ($321-million) it generates annually finances railway projects. (Ethiopia has announced plans to build 5,000km of railway lines by 2020.)

The government, however gave approval for private companies to provide value-added services – all services other than standard voice calls last year. So far Ethiopia’s ministry of communications and information technology has received applications from 218 firms to offer these services. South Africa’s MTN Group, Africa’s largest mobile phone company, has already been awarded a licence.