Ethiopia Insight - American Company Studies Reform for ETC

American Company Studies Reform for ETC

With an office in the basement of Ethiopian Telecommunications Corporation's basement, an American company has been hired in an attempt to become more competitive.

ETC hopes the company can help them become more competitive and increase its capacity to meet growing demand.

21 March 2007

The Ethiopian Telecommunications Corporation (ETC) has hired PTE International Inc, an American company, to study and implement major management reforms.

Five experts from the US, side by side with experts from the Corporation have been working on a Management Reform and System Process Re-engineering program for about four weeks now.

Currently located in the basement of ETC’s building on Churchill Avenue on the road from the National Theatre to Laghar Train Station, the Americans are rumoured, by top ETC sources to be in town for about a year.

Although ETC declined to give confirmation, Fortune has learnt that the Company is being paid more than five million dollars for the services that it is rendering to the Corporation.

The experts will mainly be engaged in making reforms and establishing the needed regulations, departments, and manpower for the telecom services that the Corporation administers.

In addition to this, the PTE study would also determine viable procurement methods for the infrastructure capacity building projects that are being undertaken by ETC.

This study will be the foundation for the mandates that is given to management members and the working procedures followed by executives for systems management and infrastructure processing.

Sources close to the situation disclosed to Fortune that the main goal for the re-engineering process is to make the Corporation as competitive and as efficient as possible. In the current state that it is in, the company is not able to handle its projects and customer services according to international standards, added the sources.

ETC, over 100 years old, has 35,000 Internet, 800,000 landline and over a million mobile subscribers.

The current executive management under the leadership of Amare Amsalu replaced the former body headed by Tesfaye Birru. The management suspended purchases worth 250 million Br last December, stating that the procurement methods previously followed by the Corporation were not right and needed to be replaced with a new system.

The Corporation has still maintained this freeze on large-scale purchases until the implementation of the management reform, members of top management disclosed to Fortune.

ETC’s five-year plan indicates that it is intending to spend 37.5 billion Br for infrastructural instalments and other operations.

Luckily for the Corporation, 1.4 billion dollars of this amount has been covered by the Chinese Zhongxing Telecom Equipment (ZTE) corporation, which managed to get an advance loan from its own country. ZTE signed a memorandum of understanding (MoU) in November 2006 with ETC to undertake a large part of the huge construction projects that ETC is planning in the upcoming five years.

“Harmonizing the studies and recommendations made by the Americans with the working procedures of the Chinese corporation is the biggest challenge ETC’s management faces,” said an expert in the field, “If the management succeeds in coordinating and implementing their plans, it will have a tremendous accomplishment.”

On the other hand, ZTE and ETC have not finalized the loan and cooperation agreement. The final contracts are waiting on the work of PTE to be completed in order to find out the viability of the two companies working together, according to Corporation sources.

By ISSAYAS MEKURIA - FORTUNE STAFF WRITER