Tanzania: Huawei sues Hits Telecoms for non-payment

Telecoms

The much-anticipated rollout plan by Excellentcom (T) Limited, a new mobile phone company, has stalled. The firm, trading as Hits Tanzania, risks being wound up and has already laid off about 80 workers, out of the 140 it had employed, while more than 20 had left to pursue other interests after the company failed to take off this year as it had planned earlier.

Huawei Technologies of China, which had entered into a contract to provide mobile phone network infrastructure technologies to Hits, has filed a petition at the High Court's main registry seeking to wind up the company. The bone of contention is failure by Hits to pay Huawei its dues after the latter had performed 10 per cent of its assignment of rolling out the mobile phone network countrywide.

The two firms signed a $180 million (Sh216 billion) contract in June 2008 under which Huawei was required to build Excellentcom's mobile phone network to enable it to cover the whole country within 13 months.

The advent of the global financial and economic crisis in 2008 stalled Hits' plans to roll out a mobile network. The company managed to rollout out just an estimated 10 per cent of the intended network. Excellentcom (T) Limited chief executive officer (CEO) David Charles confirmed to The Citizen on Tuesday (January 25) that the company has shifted much of its attention to the case.

"Our plans were well on course and we still believe we will achieve our goal of kicking off during the first months of this year," Charles said. But he declined to go into details over how much money the company is owed by Huawei because the issue was in the courts of law. But he claimed that the company has invested about $50 million since it started operations in the country.

The 80 workers laid off last month were all paid their dues, according to Charles. 20 others were shifted to the firm's operations in Equatorial Guinea while 14 have been retained. He said, however, that the company would look into other alternatives to roll out its services, noting however that the process would depend on the judge's decision.

"It should however, not be translated to mean that we have been idle...We have injected some $50 million into the country's telecom sector since we started operations," Mwinyi said in August.