Thursday, July 25, 2024
BusinessEricsson to resume work on mobile network expansion project

Ericsson to resume work on mobile network expansion project

The Swedish mobile giant, Ericsson, has agreed to resume work on mobile network expansion project which it interrupted due to a disagreement with Ethio Telecom some time ago.  

Ericsson has been working on a vast mobile network expansion project in South East region. The mobile expansion project was supposed to be completed in 2016. However, due to a disagreement with the former management of Ethio Telecom, Ericsson suspended the project. Six months ago Ericsson decided to pull out of Ethiopia because of disagreements with the former management of Ethio Telecom over the mobile network expansion project which was supposed to be completed two years ago.

In a press conference held last week, CEO of Ethio Telecom Frehiwot Tamiru disclosed that due to the suspended mobile network expansion project Ethio Telecom was unable to provide reliable mobile network in South East region covering towns including Adama, Jimma and Nekemte. “We were not serving the public in this region properly. There was a serious problem with the mobile network quality,” Frehiwot said.   

However, Frehiwot said that following a series of negotiations between the new management of Ethio Telecom and Ericsson the company has agreed to resume the work it interrupted. “We have arrived at a general consensus that Ericsson would finalize the mobile network expansion project. They would supply the additional telecom equipment required to complete the project. The negotiation is nearing completion and we would soon start the implementation process, “Frehiwot said.

The Chinese telecom giants Huawei Technologies Co. Ltd. and ZTE Corp. are also undertaking mobile network expansion project. The total cost of the mobile network expansion project is estimated at 1.6 billion dollars. The number of mobile subscribers has reached 64 million.

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The quality of the mobile network is shaky. Frehiwot revealed that Ethio Telecom now wants to work on quality improvement projects. “The number of customers and the network handling capacity is incompatible. There is a huge market and we consider that as an opportunity for growth,” she said.

However, the CEO disclosed that there is no plan to undertake massive expansion projects like what the telecom company used to do in the past. “Instead of undertaking expensive expansion projects we will carry out small quality improvement projects,” she told reporters in her office, which is located off Churchill Avenue.

According to Frehiowt, the telecom company has been unable to undertake development projects due to shortage of foreign currency in the past three years. “The company was unable to procure telecom equipment between 2015 and 2018 due to the foreign currency crunch the country was facing.”

However, the government recently allocated foreign currency for Ethio Telecom. The company has purchased tools required for network optimization work. Last year the company used only 120 million dollars but in the past three month alone it secured 157 million dollars.

“We are not only doing the current work but we are also clearing back logs that were supposed to be done between 2015 and 2018,” she said.  

Ericsson, a Swedish multinational networking and telecommunications company headquartered in Stockholm, has a long history in Ethiopia. Ethiopia started its business relationship with Ericsson in 1894 when it ordered for telephone receivers. Ericsson currently has a 90 percent market share of fixed-line network services. The breakthrough occurred during the 1950s when Ericsson started to supply 500-point switching systems. Ericsson opened a technical office in Addis Ababa in 1962.

The technical office was closed in 1974 when the military regime came to power, but Ericsson opened a representative office in Ethiopia in 1997.  

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