Ethiopian handset assembler Tecno Telecom Plans Rapid Expansion After Inauguration

Telecoms

Peter Gatkuoth Gey, state minister of Communications listen attentively when Amare Teferi (PhD), marketing manager of Tecno Mobile explains how the company employees assemble the mobile apparatus at the inauguration of the company last week. Tecno Telecom Ltd is eyeing its fourth stage of expansion, which could enable it to export to African markets from Ethiopia.

Tecno entered the Ethiopian market in 2011 as part of its Africa strategy, which started in 2007. It began with assembling mobile devices in its factory located near Dreamliner Hotel along Gabon Street, with a monthly capacity of 60,000 units, employing 85 local and seven expatriate staff.

A year later, the company abandoned its factory at Gabon Street and relocated to Gofa, a second phase expansion, which saw its capacity grow to 200,000 units of mobile devices a month.

Tecno also assembles parts and accessories and is working to add local content to its devices. The new factory has four assembly lines, but only two were operational when the factory was officially inaugurated on July 17, 2012.

The other two lines will begin assembling soon, according to Levi Girma, a minority shareholder in Tecno's local venture and vice president of the Information & Communication Technology Association.

Tecno, which now employs 300 local and 15 expatriate staff, is planning further expansion projects, which could boost its assembly expansion to 400,000 units a month and the number of employees to 600. That is when it expects to start export to other African countries, according to Levi.

Tecno is one of three, out of 23 licensed, that have actually commenced assembly. Four other companies are said to be in various stages of development, according to information from the Ethiopian Investment Agency (EIA).

Smadl, another Chinese company based in Shenzhen, which began operations in Ethiopia in July 2011, with its factory around Gerji, has a assembly capacity of 3,000 devices daily, using two production lines. Currently, it assembles 11 models and employs around 100 local employees.

On the other hand, Tana Communication Plc is a locally-owned assembler, which began assembling at the same time as Smadl with its factory in Bahir Dar,the regional capital of Amhara Regnal state With its three assembly lines, it has the capacity to assemble 4,500 to 5,000 devices daily. The company produces two mobile phone models and a fixed wireless apparatus.

Tana targets lower-class families with its S309 and S319 models, which support FM radio and Amharic language text and sell for 400 Br.

Tecno launched the Carlcare Service Centre for maintenance of its models, with a branch in Piazza and more to follow in Mercato, as well as other regional towns, such as Bahir Dar, Gondar, Jimma, Hawassa, Dire Dawa, Adama, and Dessie, before the end of 2012. There will also be collection centres where the mobiles will be taken to service centres.

Its competitor, Smadl, also has service centres in Addis Abeba, Jimma, Adama, and Bahir Dar. In addition to trying to enhance production capacity and open service centres, the assembling companies are trying to outwit each other by introducing new software. While Smadl has antitheft software that will inform the owner in case a device is stolen, Tecno, together with Afmobi, is developing software to enable instant messaging without being a smartphone.

Palmchat, as the software is dubbed, will be included in Tecno model phones and will enable online chatting and free text messaging, instantly, through the Internet. A distinguishing feature of the Palmchat is that it enables direct connection with friends in close vicinity who are also using Palmchat, according to Arif Chowdry, director of the Operator Department at Tecno.

The competition between the assembly companies is based on finding a market competitive edge. Since technology is already out on the market from big brands like Nokia and Samsung, localisation and price competitiveness is the trend, according to Yalemzewed Negash, an expert in communication engineering.

While both Tecno and Smadl have devices that can operate in Amharic, Oromiffa, and Tigrigna languages, Tana is opting to compete pricewise, by offering its models for 400 Br, with FM radio and Amharic texting included in the package.

The Tecno Mobile App Challenge, a competition for application developers hosted by Afmobi, opened for registration on July 12, 2012. Tecno has set aside a 300,000 Br prize for the winners to be announced in September.

There will be six winners in total, one for the platinum prize of 50,000 Br, two for the golden prize of 25,000 Br, and three for the silver prize of 15,000 Br. If the winners turn out to be from universities, the institutions will get the same rewards as the winning developers.