Ethiopian Telecommunication to be managed by France Telecom

Ethiopian Telecommunication Corporation
Ethiopian Telecommunication Corporation (ETC)
Ethiopian Telecommunication Corporation
Ethiopian Telecommunication Corporation (ETC)

The management of the state owned Ethiopian Telecommunications Corporation (ETC) has now officially been handed over to a foreign firm, 102 years after Emperor Menelik decided that such a vital communications network ought to be managed by a native.

The transfer of management from one of the founders of Ethiopia’s telecom industry, Michel Chefneux, who had run the embryonic telecommunications network for a decade beginning 1897, to Lij Beyene Yimar, in 1907, is considered as one of the crucial milestones in the history of the Corporation.

Last week, managers at the state owned telecom monopoly signed a deal with senior officers of France Telecom, thereby putting the management of ETC in the hands of a European firm, reliable sources disclosed.

The deal was signed on Wednesday, March 24, 2010, with a business team of about 10, led by Stéphane Richard, the newly appointed boss of France Telecom, according to these sources.

France Telecom, a.k.a the Orange Company, will manage ETC on behalf of the Ethiopian government for up to three years. The European company had been in a bid against South African and Indian firms to win the contract.

France Telecom-Orange will be paid an annual management fee, although there is a possibility of revenues sharing from enhanced services, according to these sources.

Nonetheless, details of the deal remain undisclosed, although France Telecom’s experts are planning to conduct inventory of staff and resources in the next seven months, before beginning to implement their plans, according to these sources.

However, the deal signed last week has not been sent to the Council of Ministers for an approval, sources disclosed.

If approved, ETC will join companies in 32 countries where the European telecom operator exist, serving a combined number of 193 million subscribers.

France Telecom has the task of ensuring the federal government’s ambitious plan of expanding telecom services across the country. The government wants to see access to telecom services become available within a radius of five kilometres to 100pc of the population by the end of this year, as opposed to 13pc in 2001.

It is investing over two billion dollars to expand the telecom infrastructure, in order to increase telecom point of presence from 1,900 four years ago to 17,000 at the end of the year, while it wants to see landlines increase from 1.1 million to four million and mobile from 1.2 million to 8.5 million subscribers.

Tamrat G. Giorgis, Fortune Staff Writer