Home Telcos Zimbabwe’s NetOne Is In Trouble For Violating Tender Law In A $251 Million Upgrade

Zimbabwe’s NetOne Is In Trouble For Violating Tender Law In A $251 Million Upgrade

by Caroline Vutagwa
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Zimbabwe’s mobile network operator, NetOne might have been a law breaker when it awarded a $251 million upgrade contract to Huawei.

It happened that the state owned Telecommunications Company told the State Procurement Board (SPB) that only Huawei was able to supply the necessary equipment for its network upgrade; according to the Independent.

Investigations, according to the independent, shows that NetOne CEO Reward Kangai only wrote a letter to the SPB on July 16 2013, requesting approval to purchase equipment from Huawei Technologies on the pretext that only the Chinese firm was able to supply network upgrade equipment given that existing infrastructure was supplied by the same firm.

“NetOne currently has two suppliers for its core network: Nokia Siemens Networks (formerly Siemens), who were awarded the initial tender for the supply of equipment to set up NetOne and the other, Huawei Technologies of China. It is not possible to upgrade equipment supplied by a vendor with effect from a different vendor,” Kangai wrote in his letter.

It was also noted that other companies that would have given the same services and are founded by China Exim Bank such as Alcatel-Lucent of Shanghai, China Communications Service Corporation Ltd, China Potevio Corporation, and ZTE Corporation, a company that has a Zimbabwean operation, were not approached by NetOne.

The NetOne and Huawei tender had the potential to prejudice government of over $120 million through inflated cost structures.

The newspaper cited a number of letters between government officials also expressing concern about the contract.

According to our records, the contract was awarded last July and was for 2,000 base stations with LTE upgrade capability.

The company said the unit price for a base station tower per unit had come down by $10 000 to $170 000 offered by Huawei since the last US$45 million network upgrade in 2010.

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