Worldwide media and telecom news are reporting a US$200 million contract between Ethiopia and Chinese ZTE to supply CDMA equipment to Ethiopian Telecommunications.
The agreement covers a three-year period and includes mobile-phone network equipment using code division multiple access, (CDMA) technology. The signing also includes the first phase of fiber transmission backbone, expansion of mobile phone services and the expansion of wireless telephone operations.
State-owned ZTE will install 1.2 million mobile telephone lines based on CDMA technology in Ethiopia’s capital Addis Ababa and eight other towns, it said.
Africa is one place ZTE has a real competitive advantage over American and European companies because ZTE’s products work well and cost less. Their equipment costs 20 percent to 30 percent less than gear from rivals such as Ericsson AB and Alcatel-Lucent, sources say. Ernest Ndukwe, head of Nigeria’s telephone regulator, stated in December last year the Chinese equipment from ZTE and Huawei cost up to 40 percent less than Ericsson and Alcatel-Lucent’s gear.
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1 danten // May 1, 2007 at 8:13 pm
Interestingly this is reported only shortly after the April 24 attack in Ethiopia, which also killed 65 Ethiopians, at the Chinese exploration field in eastern Ethiopia.
China now faces the dilemma of any country that undertakes an active foreign policy, particularly one with a foreign policy in no small part based on the acquisition of resources.
It must now decide how much to get involved in other countries’ internal security issues. Beijing could decide to strengthen its military ties with the Ethiopian government and back the latter’s crackdown, but only at the price of setting an example for other places where Chinese companies are sitting in the middle of African civil wars and ethnic conflicts.
Until now, Beijing largely has avoided talking sides in such conflicts. More active Chinese political and even military involvement (be it through additional arms sales and training or even through sending its own security forces over to its African facilities) would bring the Chinese government firmly into the middle of these conflicts.
On one hand, China needs the resources to drive its economic machine, and the political connections give Beijing a broader reach and added heft in international discussions and organizations. On the other hand, becoming an active player in African security quickly could drain Chinese resources.
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