Contesting the Chinese Model of Telecommunication Expansion in Africa

Abstract

Chapter 6 discusses the case of Huawei and ZTE, two Chinese global telecommunication giants whose success in Africa has attracted extraordinary attention. Although their presence on the continent has helped to reduce the costs of the African telecommunication industry in general and that of mobile phone service carriers in particular, their low-price strategy business model, only made possible by credit lines and low-interest loans offered by Chinese policy banks has been called into question. Inter-company rivalry and low profit margins on a similar product range are also discussed, as are cybersecurity concerns following the two companies’ successful bid to construct Africa’s backbone network for mobile telecommunications and an e-governance platform. Chapter 6 offers an assessment of these concerns and clarifies confusing issues relating to Chinese telecom companies, before examining the role of the state in the leapfrogging of the Chinese telecom industry and the implications it poses for Africa’s telecommunication take-off. The case of Angola exemplifies how perspectives on the situation in the African market can be better understood by considering events in China.