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Ericsson completes mobile network expansion projects

Ericsson completes mobile network expansion projects

Ethio Telecom, Huawei review possible impacts of US sanctions

The Swedish telecom giant, Ericsson, has completed a mobile network expansion project in the South East region which it interrupted due to a disagreement with Ethio Telecom sometime ago. 

Ericsson has been working on a vast mobile network expansion project in the South East region of the country. The mobile expansion project was supposed to be completed in December 2016. However, due to a disagreement with the former management of Ethio Telecom, Ericsson suspended the project.

In a press conference held on Tuesday, CEO of Ethio Telecom, Frehiwot Tamru, disclosed that at the beginning of the budget year Ericsson decided to pull out of Ethiopia. Frehiwot said after a series of negotiations Ericsson agreed to resume work with Ethio Telecom.

Accordingly, Ericsson completed the mobile network expansion project in South East region covering Bishoftu, Modjo and Adama towns. “As a result we are able to accommodate additional data traffic,” Frehiwot said. “We are undertaking mobile network expansion projects in “Ericsson site” in Hawassa, Jimma and Adama towns where there is a traffic congestion,” she added. 

Frehiwot said that the negotiation with Ericsson took a long time. However, she said, finally the two parties have agreed to work together. Ericsson supplied all the telecom equipment required to undertake the mobile network expansion project.

According to Ethio Telecom, the number of telephone subscribers has reached 43.6 million. The tele density stood at 44.5 percent. Of the total 43.6 million subscribers, 41.92 million are mobile voice subscribers, 22.3 million data and internet users and 1.2 million fixed line service subscribers.

In the 2018-2019 budget year, Ethio Telecom generated 36.3 billion birr revenue mobile voice accounting to 61 percent of the total revenue. The global telecom trend shows that the voice traffic is on the decline while the data traffic is thriving. The same is true in Ethiopia.

According to Frehiwot, in Ethiopia the trend shows that the voice traffic declined by 11 percent while data traffic increased by a whopping 130 percent.  

The quality of the mobile network is shaky. To improve the quality of mobile service the new management of Ethio Telecom is undertaking mobile network expansion projects.

According to Frehiwot, the company is currently working on 11 sites in Addis Ababa and its environs. “The challenge we are facing is securing site locations on time,” she said. However, she said that the company has secured eight sites and is undertaking the civil works. “These are the projects that require tower. We have completed work on expansion projects on hardware and software. As a result we are able to accommodate 30-40 percent additional traffic,” she added.

Ethio Telecom has made a tariff discount amounting to 40-50 percent that increased the data traffic by 130 percent. Incoming international calls have also increase substantially. Ethio Telecom used to handle 200,000 incoming international calls daily this has surged to 2.2 million after Ethio Telecom introduced a significant discount on its termination fee. The state monopoly earned a profit of 24.5 billion birr in the budget year that ended in June 2019.

Chinese telecom giants, Huawei Technologies Co LTD and ZTE Corp, are undertaking mobile network expansion project. The total cost of the mobile network expansion project is estimated at 1.6 billion dollars.

Frehiwot said that ZTE and Huawei are Ethiopia’s strategic partners. Asked by journalists about the impacts of the US sanctions on Huawei, Frehiwot said that since Huawei has been actively engaged in telecom infrastructure development projects in Ethiopia, Ethio Telecom and Huawei are jointly studying the possible impacts of the US sanctions on the company that may have repercussions on Ethiopia’s telecom infrastructure. 

Ethio Telecom has developed a three-year telecom development strategy, which was approved by the board of directors last week. Ethio Telecom board is chaired by Temesgen Tiruneh, who was recently appointed as president of the Amhara Regional State.

The Ethiopian government has enacted a new law that enables it to liberalize the telecom sector. The 125-year-old state monopoly, Ethio Telecom, would be partially privatized and additional two international telecom operators would join the local telecom market through a competitive bid. The government has hired international consulting firms that would undertake asset valuation of Ethio Telecom.