ADDIS ABABA (Reuters) - Ethiopia signed an agreement late on Thursday to outsource the management of its sole telecoms provider to France Telecom as it seeks to improve coverage and service.
The agreement marks the first foray by a foreign company into Ethiopia’s state-owned telecoms industry, which remains one of Africa’s few remaining government monopolies in the sector.
The management of Ethio Telecom will be taken over by the France Telecom for two years, in a deal worth 30 million euros for the French company, the state-owned monopoly said.
“France Telecom will strive to improve and modernise Ethio Telecom’s overall business aspect by implementing a new organisational structure,” it said in a statement.
Ethiopia has the second highest population in Africa after Nigeria but has one of the least developed telecoms industries on a continent where mobile phone use is exploding.
Mobile phone usage is about 5 percent out of a total population of more than 80 million people. In neighbouring Kenya, mobile penetration is more than 50 percent.
The Ethiopian government has invested heavily in its telecoms industry in the past few years in a bid to boost communication flows and reduce rates, including an 80 Gigabyte fibre network via the Port of Sudan landing station.
Chinese telecoms equipment maker ZTE bagged a contract from Ethiopia in 2008 to build next-generation telecoms networks in 14 cities.
The Horn of Africa nation, however, has so far shrugged off calls by the International Monetary Fund and other agencies to liberalise its telecoms sector.