How one company created a revolution

ZTE has transformed Ethiopia by building the country's telecom network

Words and actions of top Ethiopian leaders speak loudly about ZTE, one of China's largest providers of telecom equipment and networks.

Former Ethiopian prime minister Meles Zenawi described the mobile network in Ethiopia that ZTE built as "enjoying the same status among Ethiopians as the Great Wall enjoys among the Chinese".

When current Ethiopian President Mulatu Teshome visited Beijing in early July to meet Chinese leaders including President Xi Jinping and Premier Li Keqiang, he also traveled to Shenzhen in Guangdong province to visit ZTE, where its headquarters have been since it was founded in 1985.

The number of mobile phone users in Ethiopia, Africa's second most populous nation, with 92 million people, has surged in the past seven years from less than 1 million to 22.4 million by March of this year. That is largely thanks to ZTE.

Whether in downtown Addis Abba or Dukem, a small suburban town about 37 km from the capital, people from all walks of life can be seen using mobile phones. The penetration rate nationwide has risen from 1 percent in 2007 to nearly 25 percent now.

It all started in November 2006 during the Forum on China-Africa Cooperation summit in Beijing, when the private Chinese company secured a $1.5 billion contract to become the sole builder of Ethiopia's telecom network. In just four years, Ethiopia's mobile network took off.

In a three-phase project involving equipment worth $1.5 billion and construction worth $550 million, ZTE Ethiopia expanded Ethiopia's telecom network.

Then, on Aug 8 last year, ZTE and Huawei Technologies, its main Chinese competitor, jointly won a $1.6 billion contract from the Ethiopian government to expand mobile phone infrastructure and introduce 4G broadband to the capital, Addis Ababa.

The agreement, split between the two companies, will double the mobile subscribers to about 59 million, says Jia Chen, CEO of ZTE Ethiopia.

Under the government's five-year Growth and Transformation Plan (2010-2015), Ethiopia aims to increase mobile phone subscribers to 40 million and Internet service subscribers to 3.7 million.

The five-year plan is the Ethiopian government's ambitious program to boost the economy and improve people's living standards. Under the plan, Chinese companies, which are increasingly active in the country, are also taking part in road and railway projects.

For Jia, the new agreement to expand the network has come at least four or five years late because the network ZTE had built in previous years has suffered from too many users.

That, coupled with other problems such as frequent power outages that hit base stations and a lack of maintenance capacity by Ethio Telecom, the only integrated telecommunications services provider in the country and a government monopoly, has sometimes resulted in relatively weak signals in some areas.

"We are the constructor, not a service provider," Jia says, in response to a recent Western media report that ZTE Ethiopia should be held responsible for the weak signal in some remote areas.

Jia Chen, CEO of ZTE Ethiopia

About 60 to 70 percent of the people working in Ethiopia's telecom businesses have been trained by ZTE Ethiopia over the years. Besides training 1,000 engineers and donating equipment worth $8 million to the training center, ZTE has worked with 13 universities to provide free training in a country where there is a dearth of engineers.

Yonas Getachew, a manager in the contract management department of ZTE Ethiopia, says he is happy working with the company. "Every day I learn lot from Chinese about the technology."

Getachew praises the working environment at ZTE Ethiopia and says he is proud that the company is a pioneer that started the telecom expansion in his country.

Over the years, it has built a school, planted thousands of trees and donated to orphanages and schools. In June it donated 4,677 reference books to three schools in the suburbs of Addis Ababa.

ZTE Ethiopia, located in a high-rise building in downtown Addis Ababa, now has 300 employees, 60 percent of whom are locals.

The massive work undertaken by the company has also greatly benefited its local partner, Ethio Telecom. As a result of the expanding telecom infrastructure, the profits of Ethio Telecom have multiplied in the past few years, largely due to the growing number of mobile phone and Internet users. Ethiopia is one of Africa's fastest-developing economies, and its ninth largest, and one that does not depend on resources.

It is estimated that about 600,000 jobs related to the telecom industry have been created in the country since ZTE Ethiopia took part in a national telecom expansion program in 2006.

ZTE's Ethiopia experience, in which a single telecom equipment firm helps build a country's telecom network, has often been cited as a role model for Chinese companies in Africa.

Jia, though only 38 years old, has already worked in Africa for about 13 years, in South Africa, Zambia to Ethiopia.

The stable and peaceful environment in Ethiopia is a big attraction to him and his company, he says, but there is more to it than that.

"Ethiopia's large population presents a huge market potential as well as a gateway to other African nations."

chenweihua@chinadailyusa.com.cn

(China Daily Africa Weekly 09/05/2014 page21)