The government is considering strategies on how to revise downwards the retail prices of the recently launched 4G LTE Internet by at least 50 per cent to address the low uptake to the technology.

Despite the high speed connection that the technology offers, the adoption rate by the market has been slow, with a large section of the potential clients claiming that it is not economically viable.

The Fourth Generation Long-Term Evolution Internet was launched in the country in October, last year, after the necessary infrastructure was installed.

The Minister for Youth and ICT, Jean-Philbert Nsengimana, said the retail price for the services was determined in three phases which they were now looking to revise downwards to increase uptake.

"In the pricing of 4G, we are looking at three parts. There is a wholesale price, retail price which includes a profit margin and there is a tax part. We are looking to try and cut each of the three parts to be able to try and reduce it by at least 50 per cent,” the minister said at a news conference in Kigali on Wednesday.

Without revealing the exact mechanisms the government had in mind, the minister said it was their intention that Rwandans receive the full benefits of high speed internet.

However, he said interventions and actions will have to be done in a way that will not interfere with the sustainability and profitability of the businesses for the ICT sector to keep attracting investments.

Current market pricing

Currently, the market pricing of monthly subscription with bundles of up to 100GB costs an average of Rwf350,000, while 200GB costs Rwf690,000.

Nsengimana said price revision will not be the only requirement to reduce the cost of the services; there is need to ensure that it gives value for money to the clients.

"We are working with the industry to provide and propose services that make unique use of 4G LTE so as to increase its presence on the market,” the minister said.

Nsengimana added that the intervention would be coupled with continued awareness campaigns promoting the service and its benefits to the public.

"The awareness, services, regulatory measures and economies of scale factors (more demand, less costs) will drive up demand and as the foot-print increases, the demand is going to increase in turn, driving the pricing down,” Nsengimana said.

The service is now available in four cities across the country.

User concerns

The intervention comes after concerns by clients that the service was not economically viable to the majority of potential clients, who are mainly small and medium enterprises.

The New Times in December, last year, reported that most 4G retailers lament that sales were slow with each of them having a subscription of about 200 subscriptions of 4G, which was slower than anticipated.

Gloria Ngabire, the chief commercial officer at Axiom Networks (a retailer of the service), welcomed the government’s intentions to revise downwards the pricing, saying it will boost the service’s rollout.

She said it would have multiple benefits for the economy, the industry and the consumers as it would come with lower costs that would benefit all stakeholders.

In a past interview with The New Times, Rhee Dongwon, the chief marketing officer at Olleh Rwanda Network (ORN), said more government and corporate users were likely to go for the service compared to private users.

Although noting that the trend was going up, Dongwon said it was still early to establish trends of uptake as it has only been three or so months since the commercial launch.

Currently, there are six retailers of the service, with four more expected to join the market soon.The high-speed Internet technology was launched under a private-public partnership deal by the government and Korea Telecom, that resulted in the establishment of ORN.

The collaboration intends to have high-speed 4G broadband network cover 95 per cent of the Rwandan population in the next three years.

On its launch, the technology was termed as an addition to the country’s ICT ecosystem that steers the country closer to the envisaged knowledge-driven economy and create a better business environment, among other impacts.

editorial@newtimes.co.rw