Ethiopia benefits from vendor financing in $1.6B deal with ZTE, Huawei

ZTE has formally been added to the $1.6 billion (€1.2 billion) mobile infrastructure deal with Ethiopia, after fellow Chinese vendor Huawei secured the first half of the deal in late July.

The two equipment manufacturers have been selected to build an LTE network in the capital, Addis Ababa, and help deploy 3G service throughout the rest of the country. According to Reuters, the arrangement also includes vendor financing since both companies will provide low-interest loans to Ethiopia.

Vendor financing gained something of a bad name after excessive use of the measure by some vendors caused significant financial problems in the past. But the Ethiopia deal indicates that the policy of financing next-generation equipment for operators is still live and kicking. Indeed, Telefónica secured a $1 billion vendor financing deal to enable it to buy equipment from Ericsson in March.

According to Reuters, Huawei and ZTE have relied on backing from state-linked banks to offer financing to their big customers in recent years, giving them an advantage on some contract negotiations.

Andualem Admassie, acting chief executive officer of state-run Ethio Telecom, told Reuters that the agreement would enable the country to double the number of subscribers to more than 50 million.

Ethio Telecom is the only mobile operator in the country of more than 80 million people, one of the last remaining countries in Africa to maintain a state monopoly in telecoms.

For more:
- see this Reuters article

Related Articles:
Huawei, ZTE to share $1.6B deal in Ethiopia
Report: Ethiopia to partner with Huawei, ZTE to expand mobile access

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.