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Viewing cable 07ADDISABABA1348, ETHIOPIA: LAYING GROUNDWORK FOR DEVELOPMENT

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Reference ID Created Released Classification Origin
07ADDISABABA1348 2007-05-03 08:12 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Addis Ababa
VZCZCXRO4163
RR RUEHROV
DE RUEHDS #1348/01 1230812
ZNR UUUUU ZZH
R 030812Z MAY 07 ZDK
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC 5927
INFO RUCNIAD/IGAD COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0432
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0018
UNCLAS SECTION 01 OF 02 ADDIS ABABA 001348 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR AF, AF/E AND AF/EPS 
LONDON, PARIS, ROME FOR AFRICA WATCHER 
 
E.O. 12958: N/A 
TAGS: EINV ECPS EINT ET DJ CH SU XW
SUBJECT: ETHIOPIA: LAYING GROUNDWORK FOR DEVELOPMENT 
THROUGH FIBER OPTICS 
 
ADDIS ABAB 00001348  001.2 OF 002 
 
 
1. (SBU) SUMMARY:  On April 27, Minister of Transportation 
and Communication Juneidi Sado and State Minister Getachew 
Mengiste met with Ambassador and poloff to discuss the state 
of Ethiopia's information and communications technology (ICT) 
infrastructure and capacity building. Minister Juneidi said 
Ethiopia had agreed to purchase 14,000 kilometers of fiber 
optic cable from a Chinese vendor, possibly the largest 
project of its sort in Africa.  Juneidi said three years of 
negotiations with Djibouti to connect to the Internet 
backbone had not been productive, as Djibouti was interested 
in immediate financial gain and less concerned about its 
long-term commercial relationship with Ethiopia.  END SUMMARY. 
 
------------------------------------- 
CHINA WINS TELECOM EXPANSION CONTRACT 
------------------------------------- 
 
2. (U) Minister Juneidi said Ethiopia had agreed to purchase 
14,000 kilometers of fiber optic cable from a Chinese vendor, 
4,000 kilometers of which  have already been laid.  The 
six-person team currently monitoring the project would soon 
be expanded to include additional U.S. and South East Asian 
managers.  Hailing the project as the "next generation" of 
technology, the Minister asserted that it was the largest 
fiber optics project of its sort in Africa. 
 
3. (U) According to Ethiopian and Chinese state-run media, 
Ethiopia's state-run telecommunications monopoly, the 
Ethiopian Telecommunication Corporation (ETC), signed a 1.39 
million birr (USD 158 million) agreement on April 27 with 
China's Zhong Xing Telecommunications Equipment Company (ZTE) 
to execute three telecom service expansion projects.   The 
project agreement includes the first phase of fiber 
transmission backbone; expanding mobile phone service in 
Addis Ababa and eight other cities by 1.2 million lines in 
anticipation of the Ethiopian millennium celebration in 
September 2007; and adding 652,000 wireless telephone lines. 
The project would increase the number of fixed and mobile 
telephone service subscribers to over 14 million 
(approximately 18 percent of the population). 
 
4. (U) The state-run Ethiopian News Agency reported that the 
ETC-ZTE project calls for the installation of fiber optic 
cable via Kenya, in addition to existing cable via Sudan and 
Djibouti.  Separately, ETC announced in February 2006 that 
Ethiopia and Sudan were working jointly to extend a 
220-kilometer fiber optic telephone line across the 
Ethio-Sudanese border from Gonder to Gelabat, with the cost 
of the extension being covered by the Government of Sudan. 
 
------------------------ 
DJIBOUTI MISSES THE BOAT 
------------------------ 
 
5. (U) According to Minister Juneidi, three years of 
negotiations with Djibouti to connect with the Internet via 
the Red Sea trunk had been non-productive.  Juneidi expressed 
concern about stymied telecommunications talks with Djibouti. 
 Djibouti officials were interested in immediate trade and 
bidding opportunities, but less concerned about their 
long-term commercial relationship with Ethiopia, he said. 
Although the Minister continued to keep his "ears and doors 
open" for  transactions with Djibouti, he noted that over the 
last 18 months, agreements had already been reached with 
Sudan and Kenya.  Observing that "everyone" (including Sudan, 
Djibouti, Ghana, and Tunisia) "wants to be a hub" or "offer a 
trunk," the Minister said he was asking potential partners to 
clarify what, how, and where their hubs and trunks operated. 
 
--------------- 
LONG-TERM GOALS 
--------------- 
 
6. (U) Minister Juneidi underscored Ethiopia's need to 
attract foreign direct investment, with a focus on fiber 
optics infrastructure.  As ICT will require significant human 
capital, Ethiopian universities will need to produce scores 
of IT professionals and engineers over the next 5-8 years, he 
said.  The Minister took issue with the Ambassador's 
suggestion that Chinese vendors lacked the capacity to take 
Ethiopian technology to "the next level," while highlighting 
the potential for other partnerships with American companies 
and a variety of stakeholders. 
 
7. (SBU) In mid-May, Verizon representatives will visit 
 
ADDIS ABAB 00001348  002.2 OF 002 
 
 
Ethiopia to discuss long-term planning for security and ICT 
signatures. 
 
8. (U) Minister Juneidi and his team have visited ICT "smart 
villages" in India, Egypt, and China, and hope to travel to 
Silicon Valley shortly.  The Ministry has acquired land and 
completed the design for a similarly styled smart village, 
and will soon be ready to break ground on the project. 
Juneidi said that completing the ICT transformational process 
would require a decade, and expressed hope that latter stages 
of development of ICT infrastructure would attract long-term 
American investment.  Just as Addis hosted a large diplomatic 
community, it also needed a community of long-term investors, 
he said. 
 
--------------- 
THE WAY FORWARD 
--------------- 
 
9. (U) COMMENT: Prime Minister Meles has previously indicated 
that Chinese partners have offered much more attractive 
financing arrangements for telecom projects than Western 
providers.  (NOTE: According to press reports, the Chinese 
government agreed in February 2007 to loan USD500 million to 
Ethiopia, and to make provision for an additional USD1.5 
billion in short-term trade credits.  END NOTE.)  It is worth 
noting that while the GOE continued to expand its 
infrastructure and fiber optic capacity, state-owned ETC has 
not yet marketed broadband Internet access to consumers in 
Addis at accessible rates.  Post will intensify its 
engagement with the GOE on telecom issues in an effort to 
accelerate development and seek more opportunities for U.S. 
firms.  END COMMENT. 
YAMAMOTO