In May 2022, a message pulled the "5G equipment supplier" into the spotlight again.
On May 9, Ethiopian Telecom (Ethio Telecom) announced that it will launch pre-testing of 5G network commercial services, first launching 5G network services in 6 regions of the capital Addis Ababa, and will gradually expand coverage in the future, and ethiopian telecom's equipment supplier for this 5G service is Huawei, which has previously been pushed to the forefront by the United States.
Although Huawei has been a veteran player in the Ethiopian telecom market for more than 20 years, the process of participating in the construction of Ethiopia's 5G has not been smooth. Because just a year ago, Huawei was almost "out" because of the Western United Capital bid: at that time, an Anglo-American-Japanese consortium defeated a South African company cooperating with China's Silk Road Fund in a tender to qualify for building a wireless network supporting 5G in the country, and the US government agency that funded it specifically stressed that Huawei or ZTE equipment should not be used.
The story begins on April 20, 2021. Telecom operation industry media "Capacity Media" reported on the same day that Huawei took over the business of promoting 4G services from Ethiopia Telecom. However, the most high-profile news of the day were two others:
1. The Chief Executive Officer (CEO) of Ethiopian Telecom said that Ethiopian Telecom plans to launch 5G services in 2022, but did not disclose details.
2. Ethiopia will issue new telecommunications licenses in the coming months, which means that Ethiopian Telecom's national monopoly will be broken.
According to California Media, two groups intend to apply for new telecommunications licenses. One is a group of telecommunications companies led by the British Vodafone consortium, whose partners are two members of the consortium in Africa , Kenyan telecom operator Safaricom and South African telecom operator Vodacom — and the other is led by MTN Group, South Africa's largest telecommunications operator, which is a long-term customer of Huawei and ZTE.
However, this seemingly ordinary business practice was quickly involved in political issues.
In May 2021, Ethiopia's first new telecommunications license was taken by Vodafone's consortium, but the Wall Street Journal reported on the matter with the phrase "a U.S.-backed consortium defeated a Chinese-funded consortium." It turned out that in addition to Safaricom and Vodacom, Vodafone's partners also include the British government's venture capital fund CDC Group, Japan's Sumitomo Corporation and the American International Development Finance Corporation (DFC). The agency was established in December 2019 with funding from the U.S. government to provide China's "alternative" to foreign infrastructure projects.
DFC is willing to provide billions of dollars in financial support to Vodafone's consortium and help them buy equipment from non-Chinese, more expensive suppliers such as Ericsson, Nokia or Samsung at rates well below commercial banks. Of course, they also made it clear that this money cannot be used to buy telecommunications equipment from Huawei or ZTE. It's an attempt by the U.S. to use new financial instruments to gain influence and ensure that strategic assets in foreign countries are in the hands of allies.
Not only that, ethiopia will entrust Vodafone consortium group to build a 5G-enabled wireless network across the country. Bloomberg reported that with the strong support of the DFC, Vodafone Consortium has pledged to invest $8.5 billion in the Ethiopian network over the next 10 years, including $850 million in licensing fees; on the other hand, South Africa's MTN has submitted a $600 million offer in cooperation with the China Silk Road Fund. The Ethiopian government intends to sell another telecommunications license, and the new auction will begin after the policy adjustment.
However, before the Ethiopian government could sell the new telecommunications license, something went wrong within vodafone's consortium.
Bloomberg reported two days after the Wall Street Journal's "Success Report" that the US International Development Finance Corporation's decision to suspend investment in Ethiopia was caused by the country's intensifying armed conflict.
In November 2020, Nobel Peace Prize laureate Andi Abi Ahmed of Ethiopia sent troops to the country's northernmost Tigray region to overthrow the rule of the Tigray People's Liberation Front. Although government forces initially made great progress and announced the capture of The region's capital, Merclair, in the same month, the tide of the war took a sharp turn for the worse. In May 2021, Al Jazeera said the Tigray People's Liberation Front regained control of Merklay and then advanced toward neighboring Amhara and Afar, about 300 kilometers from the capital Addis Ababa. They also allied themselves with the rebels, the Oromo Liberation Army in Oromo State, to threaten Addis Ababa from the south and west.
In November 2021, as Abi personally went to the front and the situation of government forces began to reverse, the Tigray People's Liberation Front announced its withdrawal from the Tigray area the following month. At present, the two sides are in a state of truce.
The northern states of Tigray, Afar and Amhara became the "battlefields" of this armed conflict.
Bloomberg reported in May 2021 that billions of dollars from the DFC would appear "out of place" against the backdrop of economic sanctions imposed on Ethiopia by the United States to end the armed conflict in Ethiopia. Not only that, but even funds from the World Bank and the International Monetary Fund will be affected, with DFC insiders saying they are waiting for instructions from the Biden administration. Vodafone Consortium had just decided the week before to get a $500 million loan from the DFC to help cover the cost of acquiring and developing a telecommunications network, and once the DFC withdrew the funds, the Vodafone Consortium would have to get cash from elsewhere at a higher cost.
Since then, Vodafone, Safaricom, Vodacom and DFC have not responded to requests for media comment. But about a year later, the dramatic news came that Vodafone's consortium, which had been trapped by Western capital constraints, was in Ethiopia, safaricom, which had also chosen Huawei and Nokia as suppliers of its mobile network equipment.
According to California Media reported on March 7 this year, Nokia will provide network coverage services for the capital Addis Ababa, and Huawei will provide services for other parts of the country. Safaricom's chief external affairs officer for Ethiopia said the choice of Huawei was approved by the Ethiopian government and Sabaricom Ethiopia's shareholders. Safaricom Ethiopia's largest shareholder is Safaricom Kenya, holding 55.7 percent of the shares. This was followed by Sumitomo Corporation (27.2%), CDC Group (10.9%), and Vodacom South Africa (6.2%). Safaricom Kenya said in March last year that it would work with nokia and Huawei, two network equipment suppliers.
Promotional image of Safaricom Ethiopia
But a month later, Safaricom Ethiopia missed the deadline to launch its web service without giving any new dates.
Safaricom Essa had planned to launch their web service on April 9, but nothing happened that day, and the company and even the Vodafone consortium in the UK simply said "we will update on our plans to go live in the coming days," According to California Media on April 12. Not only that, but the company's website also failed at one point, leaving only the words "under maintenance", and its social media accounts did not say anything about the time of launching the service.
As of now, Safaricom has spent $1 billion of its $8.5 billion plan over a 10-year period, according to which they will cover 25 percent of Ethiopia's population a year after its service goes live. But now, Safaricom's stagnation undoubtedly gives competitors, Ethiopia Telecom, the opportunity to continue to grow. As a state-owned company, Ethiopian Telecom has more than 60 million subscribers and still effectively monopolizes Ethiopia's telecommunications industry. Ethiopia Telecom launched its own mobile payment service, Telebirr, during this time, which currently has 13 million users and a total transaction value of $103 million.
According to Reuters on May 9, the Ethiopian government originally launched a tender process to sell a 40% stake in Ethiopian Telecom to private investors in June last year, but in March this year, the government said it had postponed some of the planned privatization due to the economic environment at home and abroad. Separately, the Ethiopian government suspended a second telecommunications licence in December, saying the new round of tendering would be restarted "in the near future".
So far, whether it is the state-run Ethiopian Telecom that has grabbed the top spot, or the private Safaricom Ethiopian company that missed the launch time, they have invariably chosen Huawei equipment to promote its 5G business – which is very different from huawei's situation of losing the Ethiopian market opportunity a year ago because of the Western capital winning the bid. On the other hand, some Western countries have interfered in the development of other countries from a political perspective, while curbing the development space of Chinese enterprises.
On the 5th of this month, US Deputy Secretary of State Sherman visited Africil, a US-funded telecommunications company, during a visit to Angola. "Today in Luanda, I visited Africell Angola, a top-tier innovative American company in Angola that is expanding its 5G channels using trusted technology components.' On the 6th, when asked whether the tweet was alluding to Huawei, and how American and Western companies would provide 5G services to African countries to get them rid of Chinese telecommunications companies, Sherman said that this is not a satire on Huawei, "We have been very direct, we think that when countries choose Huawei, it means that they give up their country's sovereignty and hand over data to another country." They will find themselves unknowingly being watched. While smearing Huawei, she once again made a pitch to Africell.
In this regard, Foreign Ministry spokesman Zhao Lijian responded on the 9th that Chinese enterprises, including Huawei, have carried out good mutually beneficial cooperation with African countries and many other countries in the world, which has effectively promoted the improvement and development of local communication infrastructure and provided advanced, high-quality, safe and cheap services for local people, which are generally welcomed. In the course of the cooperation, there has not been a single cybersecurity incident or monitoring behavior.
Zhao Lijian said that the Chinese government has taken a clear stand against the use of information technology to conduct mass surveillance of other countries. In the Global Data Security Initiative previously proposed by China, China explicitly called for information technology companies not to set backdoors in their products and services, and that countries should not directly access data located in other countries from enterprises or individuals. If the U.S. side really cares about data security, it can publicly support China's initiative or make similar commitments when promoting U.S. companies and products.
"I would also like to stress that the choice of who to cooperate with is a matter for African countries and their people themselves, and it is not the turn of the US side to point fingers." Zhao Li insisted that we would like to advise relevant US officials that instead of spending time spreading lies and rumors everywhere and playing tricks on thieves and shouting to catch thieves, it is better to start with a correct mentality, start from themselves, earnestly respect the sovereignty of African countries, and do something practical to help African countries fight the epidemic and develop their economies.