By William Davison
Nov 26, 2014
Ethiopia will give other companies parts of a telecommunications project it awarded to ZTE Corp. (000063) after a contract dispute with the state-owned Chinese company, Communications and Information Technology Minister Debretsion Gebremichael said.
The government has held talks with Helsinki-based Nokia Oyj (NOK1V) and Ericsson AB of Sweden about them taking over segments of the contract, which seeks to double mobile-phone network capacity in the Horn of African country and expand 3G coverage nationwide by June, Debretsion said.
“We’ve already started negotiations with Ericsson and Nokia,” he said by phone yesterday from the capital, Addis Ababa. “We didn’t sign as we have to close the issue with ZTE before getting into any other major contractual agreement.”
Neither ZTE nor Nokia immediately responded to e-mails seeking comment. Ericsson doesn’t comment on “rumors or speculations,” spokeswoman Elisabeth Mansi said by e-mail.
Ethio Telecom, the state-owned monopoly provider, in July 2013 signed deals worth $1.6 billion with ZTE and China’s Huawei Technologies Co. to improve Internet and phone services. In line with a previous ZTE contract, the companies agreed to provide most of the financing themselves from Chinese lenders.
ZTE’s work has been delayed by at least six months after it rejected a “mandatory” provision to upgrade existing infrastructure at no extra cost as it expanded networks, Debretsion said. Although the company has now agreed to the condition, other firms need to be involved to make up for lost time, he said.