ZTE, Huawei Might Receive Upcoming Project Under New Arrangement
Bruno Duthoit, current CEO of ethio-telecom, and Abdurahim Ahmed, right, head of public relations attendeda press-conference at Sheraton Addis, on January 3, 2012, where they had to field several questions about the frequent network problem mobile subscribers are facing.
The state telecom monopoly is dividing the country into 11 infrastructure zones, in order to better manage each network, and to simplify telecom equipment procurement.
A study, that has just been concluded, will create 'telecom circles' that are used to create a boundary between the networks, provided by various suppliers.
The centres are developed using different parameters, including; demography, customer base and geographical location. For instance, Addis Abeba, whose current telecom infrastructure is mainly set by ZTE, is regarded as one centre.
The new zoning system allows only one sole vendor within a circle, in order to ensure better operational management. This will help ethio telecom to undertake swift maintenance service, as technicians will be deployed to specific centres.
To date, there are around 16 circles. They cover a very limited area, however, there are a variety of vendors within a single circle. It is more like a cluster of vendors, an expert at ethio telecom explained. This means that a vendor's equipment might be in different geographical locations. For example, a technician might be deployed toNazareth, in Oromia, and Mekelle, in Tigray to fix a technical problem, which occurred on the same equipment provider.
The system is adopted fromIndia, according to a high ranking expert at ethio telecom.Indiahas around 22 circles that are managed by different telecom operators, with calls from one centre to another being considered as long distance.
The current system creates a poor quality service, because it lacks a smooth transition when a call transits from one vendor's infrastructure to another. To date, telecom equipments are supplied by Ericsson, Nokia and ZTE. Those considered as vendors inEthiopia, currently, are Ericsson, Nokia, Siemens and ZTE, each of which, have set up networks for ethio telecom.
The new division will help the government to divide the work between the two Chinese companies, currently bidding 1.5 billion dollars for vendor financed network expansion projects.
Both Huawei Technologies Co and ZTE Corporation are negotiating with the government, who have opted to offer both companies a piece of the contract. The technical negotiations are regarding how the two can divide the project and the associated finances.
The Ministry of Communication & Information Technology (MCIT) is also finalising the financial negotiation with the companies, according to Debretsion Gebremickeal (PhD).
"We are negotiating with the companies for them to lower their financial offers to at least one billion dollar," he told Fortune.
Negotiations are also underway regarding interest rates and grace period, he added. He declined to state, however, what the offer was, made by the companies.
The two-year project is aimed at expanding the network, in order to double the 20 million mobile users by 2014/15.
Bruno Duthoit, CEO of ethio telecom, admitted to quality problems, when addressing the press about the conclusion of the two-year management contract with France Telecom. He stated that the increasing number of subscribers had led to a very fast increase in traffic, which was the main reason for the network issues.
The MCIT conducted a performance evaluation of the French company before the contract was over. Evaluated on modernisation, knowledge and technology transfer, revenue generation and providing quality service, France Telecom was awarded a score of 83pc.
The company did better in service coverage and penetration, than in service quality, which has not reached a satisfactory level, the company said.
"We neither penalised nor awarded the company," Debretsion said at the briefing.
The company would have been penalised if it had scored below 75pc, or awarded a prize if it had scored above 95pc, during evaluations, according to their contract, signed in December, 2010.
The current CEO, whom the government has retained for the next six months, along with his assistant, promised that the quality problem would be fixed within six months.
Bruno will be working with the Ethiopian management that has taken over for the coming six months.