The growth of the local telecom sector is below what industry players had anticipated, which of course affects their revenues. Business Times’ stephen Nuwagira & anitha kirezi talked to Airtel MD Michael Adjei about this and other issues affecting the telecom sector in Rwanda and in the region in the following report

It is important for the country to have policies geared towards growing the economy and the middle-class are essential to support digital-driven economy, services offered by telecoms, banks, and the government, Michael Adjei, the Airtel Rwanda managing director, has said.

He said Rwanda is taking right decisions in areas of deepening ICT, adding that it is important to continue "working on this area so that the country becomes a reference point in ICT for continent outside the region”.

He said the ability to develop more innovative products to ease access to services and make people’s lives more convenient, besides contributing effectively towards the Smart Rwanda initiative.

He, however, said there is need to invest more in data infrastructure, noting that data is the future (of telecoms) as it is going to be key in people’s lives.

"For us in the commercial space we believe that the future lies in the space of data. Also because of policies we have as country in digitising the entire country in terms of what we do, including e-governance, Smart Rwanda initiative; all these have to be powered by data (Internet),” he said.

He said the firm would soon unveil a yet-to-be revealed service that "will set the tone in terms of data in this market for the future”, taking advantage of interoperability of networks, which he said is also crucial in achieving a cashless economy.

Adjei argued that with the current technology, an Airtel subscriber should be able to move money around (e-money) across all networks and transact business without any problem.

On the issues of allowing more players to enter the sector, he said "it would be suicidal” to introduce a fourth telecom player in the market, arguing that the Rwandan market is not big enough to accommodate four players at the moment.

"Out of a population of 12 million people, the addressable population (people who can pay telecom service more often) are very few. In fact, Rwanda has one of the lowest levels of use of services in the region at $2 compared to about $5 in other EAC countries,” he said.

He said this enables operators in these countries to generate more revenue. So, when you introduce a fourth operator, the share of cake will reduce, but your level of investment will not reduce, he added.

Cross-border mobile money transfer service delay

Though the telecom operates cross-border Airtel Money services between Rwanda, Zambia and the DRC, the firm is yet to launch the service between Rwanda and Uganda.

He said the service has been delayed by regulatory issues, but hastened to added that they are working with the regulators in Rwanda and Uganda to address the issue.

Airtel Rwanda has a 20 per cent market share, with over 1.7 million subscribers, while market leaders MTN have 3.98 million clients, and Tigo has 3.09 million people, according to Rwanda Utilities Regulatory Authority (RURA) statistics for April.

One Area Network

Meanwhile, Adjei has said they are facing challenges with the One Area Network initiative introduced by the Northern Corridor states about two years to ease cross-border communication in the region.

"The One Area Network initiative has enabled people across the region to communicate freely, which we support. However, we but this also coming at a high cost on the service providers,” Adjei in the interview.

He said, under the initiative where call rates were cut by over 60 per cent by regional telecoms, has seen an increase in cross-border calls of almost 400 per cent (for Airtel).

Adjei said the firm supports the idea of ‘free’ communication, increased access and affordable rates, adding that were crucial for regional economies.

Under the One Area Network initiative, the Northern Corridor member states – Rwanda, Kenya, Uganda, and South Sudan – are expected to implement uniform rates data roaming on July 1.

However, called on regional regulators to urgently solved the issues of pricing, saying some countries like Uganda still charge call termination fees which affect their performance.

He said the rates were increased from 2 US cents to 4 US cents, "which is a deep cut that affects us”.

"We are in touch with the regulator, who is working with peers, especially Uganda, to scrap the termination fee of 4 US cents (about Rwf30).”

Adjei said the levy presents the sector a big challenge, calling for urgent intervention from regulators and governments of the Northern Corridor member countries to solve the issue before it cripples the industry.

He said local service providers will continue lobbying to ensure the challenge is addressed.

Kenya, Rwanda and Uganda agreed to cap the minimum roaming charges in the three states to help boost integration of the East African Community (EAC). South Sudan joined the initiative later.

Before the implementation of the One Area Network initiative, calling Uganda or Kenya from Rwanda was more costly compared to calling Asia or the US.

The initiative has been lauded by the business community and ordinary citizens across the region for significantly reducing cross-border calls as well as the cost of doing business in the region.

The harmonisation data rate while roaming has been delayed by many challenges, with some saying the operators in the region were using different systems that are not compatible, making it very expensive to implement.

However, the regional Heads of State last year ordered for implementation of the uniform data roaming rates effective July 1. However, operators call for more scrutiny of the project, arguing that it could have adverse effects on the industry.

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