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ZTE, Huawei to Get Ethiopian Telecommunications Contracts

Oct. 12 (Bloomberg) -- Ethiopia’s government will sign a two-year contract with Huawei Technologies Co. and ZTE Corp. within weeks, Communication and Information Technology Minister Debretsion Gebremichael said.

ZTE, China’s second-largest maker of phone equipment, said in May it was bidding with Huawei for a $1.3 billion government telecommunications contract.

“Both companies will be engaged,” Debretsion said in an interview in the capital, Addis Ababa, yesterday, without giving the size of the contract. “Both will have a share in the market.”

ZTE, about one-third owned by the Chinese government, has worked with Ethiopia’s state-owned monopoly provider Ethio Telecom over the past six years to upgrade phone and Internet services in Africa’s second-most populous nation.

The companies will finance the project that includes more than doubling the number of mobile-phone users to 40 million by mid-2015, Debretsion said.

“We are not investing; we are inviting companies to come with their finance,” he said. “That is why we are waiting for the negotiation.”

Agreements including technical details and how to divide the work between the companies should be made within two weeks, Debretsion said.

ZTE said in May that expectations of growth in Ethiopia’s market justify investment in the industry.

Ethiopia, with a $32 billion economy, is Africa’s second-most populous country and it population is growing at 3.2 percent a year, the fifth-fastest in the world, according to the CIA World Factbook.

The Horn of Africa nation is targeting economic growth of 14.9 percent over the next five years, former Prime Minister Meles Zenawi said in August.

To contact the reporter on this story: William Davison in Addis Ababa at wdavison3@bloomberg.net.

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.

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