Huawei wants to establish a position in Ethiopia’s telecommunications market

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Huawei wants to steal the title of world's best smartphone manufacturer from Samsung.

December 17—In a recent interview, Loïse Tamalgo, Huawei’s public relations VP for Sub-Saharan Africa, said his company wants to establish a position in Ethiopia’s burgeoning telecommunications industry. The firm hopes to leverage its existing local partnerships in the nation’s coming telecom sector privatization.

Tamalgo also said his company is considering establishing a regional office in Ethiopia to capitalize on opportunities throughout Africa.

A Major Opportunity

In 2018, Ethiopian Prime Minister Abiy Ahmed started a transformational privatization initiative to grow his country’s economy. As part of the program, the country is opening up its telecom sector by issuing two new service provider licenses in 2021. It is also selling a 40 percent share of Ethio Telecom, its state-owned national provider.

As it happens, Ethio Telecom buys most of its telephone and Internet networking gear from Huawei. Tamalgo explained his employer intends to use that partnership to expand its presence within the market. The Chinese conglomerate is smart to pursue a position in the region because it is Africa’s second most populated country.

As Ethiopia’s private sector grows in the coming years, its need for robust digital infrastructure will increase. Foreign corporations will need strong and stable information technology support to conduct their local operations. Since 5G enables the rapid, seamless transmission of large volumes of data, it would be a fantastic infrastructural solution.

Currently, Huawei is a global leading provider in the fifth-generation mobile data networking space. In fact, the conglomerate filed more than 8,600 wireless technology patent applications this year alone. Given its resources, it could play a big part in digitalizing Ethiopia. By securing a contract to establish the region’s 5G infrastructure, the firm would generate a ton of revenue.

If things go well in Ethiopia, the company could parlay its success into a larger continental expansion. Tamalgo said Huawei is keen to explore opportunities in the Democratic Republic of Congo, Senegal, Cameroon, and Ivory Coast. The corporation might make up its recent smartphone business losses by becoming Africa’s top telecom provider.

Intense Competition

Despite its technological leadership and market familiarity, Huawei will not easily establish a leading position in Ethiopia. MTN Group, Africa’s largest wireless carrier by subscriber volume, has expressed interest in the market. Orange S.A., a Parisian corporation that serves 266 million customers worldwide, also wants to break into its telecom space.

However, Huawei’s biggest challenger is probably Vodacom, a local subsidiary of industry giant Vodafone. The firm only serves 55 million customers, but its services are available in 32 African nations. In addition, its parent company recently led a consortium in securing a $500 million loan to establish a new mobile network operator in Ethiopia.

That said, Huawei will not be competing from a disadvantaged position in Africa. As one of the area’s top networking gear vendors, it has strong ties with its wireless carriers. Because of those dealings, the conglomerate has received public support from national leaders in South Africa and Kenya. The company may turn its existing relationships into a larger regional presence as it did in Russia.

Because of its difficult 2020, Huawei is likely eager to affirm its standing as China’s largest technology company.

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