Why the USD 1.5 billion next generation network could even be more costly

If not for that poor telecom service prevailing in the country, the government’s commitment to the information and communication technology (ICT) sector could have more easily been noticed.

Yet, although the telecom service in the country is weak, Ethiopia is one of the few developing countries investing highly in the ICT sector where the investment amounts to10 percent of the country’s GDP over the last several years. This is due to the unreserved commitment of the government to lead the otherwise least developed country through a short-cut path to growth. As such, investment in the ICT sector has long become one of the government’s priority areas where it has been looking forward to ensure a better ITC infrastructure in the country to maintain and speed up the economic growth of the country.

So going forward to achieve its objective in the telecom sector, the government had in 2006 given what some reports claim to be the biggest single investment in the telecom sector in Africa, the USD 1.5 billion next generation network project to the Chinese state-owned telecom ZTE. And in a bid to ensure that costly project for which the country had secured long-term loan from none other than the EXIM Bank of China (which it has started to pay back), the government has hired France Telecom to restructure and take over the management of the newly formed Ethio Teleocm to make sure the USD 1.5 billion investment is worth it.

Ethio Telecom was then born from this desire to provide the country with an internationally recognized company that will implement state-of-the-art processes and methods in order to offer the best network and the best quality of services to customers. Now an independent international company hired by Ethio Telecom is finalizing network auditing works on the next generation network involving the installation of fiber optics and mobile phone network expansion.

During the course of time it has been operational, Ethio Telecom has been introducing new services while the number of mobile phone subscribers has topped 10 million over the last five years. And very recently, the monopoly managed by France Telecom has enabled mobile phone subscribers with an area code of No.11to surf the internet, barely mentioning the quality of the service which has been to the dissatisfaction of customers which already has been using the service.

Yet while the services being rendered by Ethio Telecom look set to progress as the monopoly retorts, a big-time challenge is lurking in the dark.

While the USD 1.5 NGN is way expensive for the least developed country which has made sure to pay back the loan it received for the very project from its scares recourses, it could even become more costly as things stand now, according to telecom experts.

“By their very nature, telecom projects are expensive,” says a telecom expert anonymously. “As such, Ethio Telecom should make sure that the grand project will not entail another major cost. And this can be guaranteed by making sure that the project involves technology transfer where Ethio Telecom engineers and experts could take care of the later maintenance works after the USD 1.5 billion NGN project is completed.”

But that is being barely witnessed, according to industry observers.

“There are already some telecom projects which were completed some years ago by other telecom vendors than ZTE,” the expert says. “And Ethio Telecom is paying hundred of thousands and millions of dollars for foreigners who are maintaining these projects installed with some millions of dollars. One can only imagine how dearly the maintenance work of the USD 1.5 billion dollar may cost Ethio Telecom in addition to the staggering investment made to colossal telecom network project already.”

Experts say whether Ethiopians will fully take care of the maintenance work and the fact that there is a technology transfer element to the grand telecom project is barely witnessed now. This is a big-time challenge that Ethio telecom and the concerned government bodies need to consider before time runs out, they advice.

That would, in fact, turn out to be the inevitable thing to do for Ethio Telecom and the concerned government bodies, as Ethio Telecom is set to launch the expansion of the NGN project, which is another gigantic project by itself where world’s No. 2 telecom network provider Huawei, ZTE and an Israel telecom ECI are vying with each other to clinch.