Ethiopia’s mobile assembling plant business thrives

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Imports of counterfeit handsets have been banned in the country
With companies closing mobile phone assembling plants throughout Africa due to stiff competition from China, Ethiopia has emerged as the only country in region to have a number of assembling plants in operation. What’s more, they are exporting handsets to other markets in Africa.

Techno Mobile is among the companies in Ethiopia that is exporting handsets. Last year the company said it planned to set up assembling plants in Kenya and Nigeria in order to capture more African markets. Techno has introduced more than 12 different products, including smartphones.

Ethiopia is positioning itself to be an ICT hub in East and Southern African region outside South Africa and Kenya.

G-Tide, another Ethiopian mobile-phone maker, said it has so far finalized expansion plans and is set to start exporting its handsets. G-Tide is now conducting research with the Metal Engineering Industry Development Institute in Ethiopia to start manufacturing various mobile phone accessories for local and regional markets.

Africa is struggling to cope with the influx of counterfeit Chinese phones that have flooded the market, almost shutting even major players like Nokia out of the market.

In 2007, China’s ZTE closed its assembling plant in Abuja, Nigeria, just after two years because the company said it was not making profit. The closure was marked up to competition from imported counterfeit handsets from other China-based manufacturers.

ZTE also failed to open a much-hyped assembling plant in Zambia that was intended to service the Southern Africa region, which has 14 countries including Zimbabwe, South Africa, Namibia, Botswana and Lesotho.

Phone from M-tech, based in Zambia, have also failed to make an impact in the country. The company has shelved its plans to start exporting to regional markets, citing competition from Chinese handsets.

Ethiopia is one of the few countries in Africa that has implemented laws banning the importation of counterfeit handsets.

The ban has forced people in Ethiopia to buy the locally assembled handsets, offered at competitive prices.

A telecom analyst in the region is blaming governments in the region for failing to protect the locally assembled handsets and failing to give incentives to the investors.

“Ethiopia’s duty (tax) structure is more attractive than most countries in Africa,” said Amos Kalunga, telecom analyst at Computer Society of Zambia.

“In addition to blocking the importation of counterfeit handsets, Ethiopia has been giving tax rebates (holidays) to such investors in order to make them viable and compete favorably with foreign manufactured handsets,” Kalunga said.