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Ethiopia : TERMINATION of Ethio Telecom\'s deal with France Telecom

Publish Date : 15-Jan-2013
Ethio Telecom has terminated its contract with France Telecom (Orange). The contract has been terminated without bonus payment. The sole communications provider in Ethiopia, Ethio Telecom was managed by the European telecom firm for the past two and half years. Now it is back in the hands of Ethiopians.

The company was selected from various international firms. It has concluded its contract with some success on modernizing the operation and upgrading parts of the management.

Debre Tsion Gebremichael (PhD), Deputy Prime Minister and Minister of Information and Communication, said that France Telecom has achieved a score of 83 as per the balance score card. Because of that fact, the company did not get any extra payment as bonus, apart from the initial amount the two companies had agreed upon since the beginning of the management contract.

The company inked a 30 million euro contract with the deal such as a bonus or penalty as per the effective performance of the company.
The Deputy Prime Minister said that if the company had scored above 95 on the score card, it would have collected its bonus, and if it had registered below 75, it would have been penalized, under the deal. The company scored 83; therefore, it received what was stipulated in the contract, although some amount has been deducted, because they did not honour some parts of the agreement,” he explained, during a press conference held on January 2, 2013.

The goal of the government to outsource the management of Ethio Telecom to a foreign company was to modernize the sixty-year old public enterprise.

The Ethiopian Telecommunication Corporation (ETC) was renamed Ethio Telecom (ET) when the government restructured the company to modernize it. The company also decreased the number of employees from a total of 12,600 to 8,600 when the foreign company took back the management.

Debre Tsion said that the modernization process took two and half years. It comprised knowledge transfer to local employees. Orange had contributed to the enhancement in service and revenue and in the application of international standards and practices.
“When key performance indicators were evaluated, they have registered success, but in terms of quality and capacity building we did not get what we were expecting,” the DPM stated.

“To implement the E-tom, which is the major international management practice, we had drafted 460 business process divisions and have already applied 402, while the rest will be implemented phase by phase,” he said.

The voucher card sale had considerably developed under the management of Orange. “Currently, there are 39,000 retailers involved in voucher card sales, which is a big success and hadn’t been applied previously,” he added.

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