Ethio telecom signed part of a 1.6 billion dollars deal with Huawei on Friday 25 July, 2013. ZTE's part of the deal was delayed for unspecified reasons.

ethio telecom initially announced that the deal was to be signed with the two Chinese companies. Together they will undertake the network expansion. In a new system, the Ethiopian state monopoly is to divide the country into 11 infrastructural zones. This is a strategy that was adopted from India six months ago.

The two companies will each be paid 800 million dollars for the work they will conduct.

Huawei's side of the contract was signed by the newly appointed CEO of ethio telecom, Andualem Admassie, and Huawei Ethiopia's CEO, Jony Duon. The event was attended by Debretsion Gebremichael (PhD), Communication & Information Technology (MCIT) minister in the rank of Deputy Prime Minister; Deriba Kuma, mayor of Addis Abeba and Ethio telecom's chairman and He Zhenping, a representative of the Chinese ambassador to Ethiopia, Qin Jion.

"We have been dealing with both companies. But, there is something that we require ZTE to complete," Debrestion told journalists, without being anymore specific.

The project is expected to provide Addis Abeba with fourth generation (4G) technology - a broadband technology allowing browsing speeds of 100mb a second. It will also enable 3G services across the country.

The new zoning system allows only one sole vendor within a circle, in order to ensure better operational management. It is believed that this will help ethio telecom to undertake swift maintenance service. Technicians will be deployed to specific centres developed through the use of different parameters, including demography, customer base and geographical location.

Accordingly, Huwaei and ZTE will share 50pc of the project, each with their own circles. The share of the two companies across the 11 zones will be determined later, after which they will sign a second agreement with the telecom company. ZTE, the only of the two companies that has set up a network in Addis Abeba, may remain solely in charge of the city. Here there have been other networks setup by Nokia, Ericsson and Siemens.

The expansion project, which is to be completed by the end of the GTP period, 2014/15, is supposed to increase the mobile service capacity from 23 million, which is its current limit, to 50 million.

"The telecom sector is still in its infancy. We thus give priority to coverage over quality," Debrestion says.

The project, which was intended to commence last year, was delayed due to the similarity of competitors, Debretsion claims.

"We opened a tender and kept it floating for some time, but we couldn't determine a single winner. The process is hectic," Debretsion said.

Despite attempts by the MCIT to negotiate a lower price, to reach as low as one billion dollars, the offer made by the companies did not come any closer.

ethio telecom will sign a contract with ZTE shortly, as there are only minor details left, says Abdurahim Ahmed, Corporate Communications Officer at ethio telecom.