Telecom company looks to Africa

By Zi Mu (China Daily)
Updated: 2006-11-03 07:29

Flagship Chinese telecom equipment maker Alcatel Shanghai Bell (ASB) expects Africa to play a major role in its overseas expansion, a company executive said.

"Africa is experiencing a big investment boom in telecom infrastructure, as witnessed in China in the 1980s and 1990s," said Zhou Tao, executive vice-president of ASB, in an interview with China Daily.

"We are expecting huge untapped potential from the telecom market in Africa. We are committed to providing the best solutions to African operators, the best services to African people and to help develop local economies."

The African telecom market has seen rapid growth in recent years. For instance, the number of mobile phone subscribers in Africa hit 76.8 million in 2004, compared to 7.5 million in 1998.

Building telecom infrastructure usually requires huge investment. Inadequate investment and unbalanced development of local economies has widened the digital divide between Africa and developed countries.

The vast majority of telephone users are based in Africa's stronger economies such as South Africa and Egypt.

Compared to the established Western telecom gear-makers, Chinese companies offer more cost-effective equipment and solutions.

Zhou said the Chinese Government's increasing financial support to African countries is giving a boost to the establishment of telecom infrastructure.

ASB, launched in 2002 with Alcatel holding a 50 per cent plus one share, is supervised by China's State-owned Assets Supervision and Administration Commission.

The Chinese firm has obtained support from the government. The Export-Import Bank of China granted it finance of 500 million yuan (US$63.3 million) in 2004 to aid its overseas expansion.

"As China and African countries build solid political mutual trust, African countries are willing to get Chinese companies involved in more infrastructure projects," said Zhou.

"We believe Chinese telecom equipment makers will have even bigger business opportunities in Africa in the future."

ASB entered the African market in 2000 and has since won major deals in countries such as Ghana, Angora and Nigeria. In 2003, the firm won a US$150 million contract to build a national telecom network in Ghana, the largest of its kind in Africa for the Chinese company.

Zhou said sales from Africa accounted for more than half of ASB's revenue generated from the overseas market "for a time," without giving further details.

ASB's domestic rivals Huawei Technologies and ZTE Corp have also been gaining momentum in Africa. Huawei now employs more than 2,000 people in Africa, more than half of whom are locals. The firm has also set up training centres in Nigeria, Kenya, Egypt and Tunisia, which has helped boost local expertise in communications technologies.

Zhou urged the Chinese Government, banks and agencies to find diverse ways to help African operators build telecom infrastructure.

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