China’s biggest tech firm has a long-term approach to Africa, which represents 5% of its global revenue
Huawei Technologies is positioning itself to get more business in Ethiopia, as the East African economy opens up its telecommunications sector.
“Ethiopia is rising and becoming much more important for the future,” Loïse Tamalgo, Huawei’s head of public relations for 22 countries in Sub-Saharan Africa, said. “Our strategy is very simple.”
The company plans to leverage its position as a vendor of the state-owned monopoly Ethio Telecom to bid for opportunities in the country, he said.
Liberalisation of the telecom industry is at the forefront of what Ethiopian Prime Minister Abiy Ahmed said in 2018 would be a wide-ranging privatisation programme. The plan was intended to bring in much-needed foreign exchange and boost the economy, while improving connectivity across country.
The country is seeking to double its mobile towers to about 14,000, which would require an investment of up to $1.1bn, and build out its fibre-optic network from less than 30,000km now, according to the Ethiopian Communications Authority. It also plans to sell a 40% stake in Ethio Telecom and issue two new telecom licences in 2022.
Vodacom Group, a subsidiary of UK’s Vodafone Group, is among carriers planning to bid for the licences, though an ongoing military conflict is giving the carrier cause for concern. MTN Group, Africa’s largest career by subscribers, and Paris-based Orange have also expressed interest in entering Africa’s second-most populous country, with more than 100-million people.
Last week, the US International Development Finance Corporation approved a loan of as much as $500m to a Vodafone-led consortium seeking to start an Ethiopian mobile phone network operator. The facility will finance the design, development and operation of a new private mobile network provider and the acquisition of a licence.
China’s biggest tech firm has a long-term approach to Africa, which currently represents 5% of its global revenue, Tamalgo said. Other priority markets for the company on the continent are Ivory Coast, Senegal, the Democratic Republic of the Congo and Cameroon. “The governments there are willing to do a lot of projects,” he said.
As Huawei has emerged as a leader in 5G, a technology which promises super-high-speed connectivity, it’s also become a major target of the US, which has been trying to convince its allies to ban Huawei equipment from their national networks on spying concerns. The UK decided in July to join the boycott, followed by Sweden. Huawei has repeatedly denied that it helps China spy on other governments and companies.
In Africa, where it is a top vendor ahead of rivals such as Nokia and Ericsson, several leaders have defended the company. President Cyril Ramaphosa said at a summit in August that Huawei was a victim of the trade war between the US and China, and that SA can’t afford to get caught in that fight.
Ethiopia, Kenya and other countries across the region have echoed Ramaphosa’s stance.