Phone giants scramble to buy off Rwandatel

TELECOMMUNICATIONS - Six mobile telephone service providers from Africa and other continents are fighting to take over Rwandatel operations. The bids opened on Wednesday saw offers from Vodacom of South Africa, R-COM of Rwanda, LAPGreen Network (Uganda), CELTEL , V-TEL Holdings (Jordan), and BIT MAP of Singapore. The privatisation of Rwandatel is set to close at the end of October once the Share Purchase Agreement is signed, according to an established work plan. The move comes weeks after the government annulled its contract with Terracom, accusing the latter of not honoring terms of contract. The offers will be analysed by an ad hoc committee created by the Minister of Finance and Economic Planning. Eligible bids must adhere to at least 80 per cent of the requirements established by the committee. Cabinet will be given a report at the end of this month. It is the only body with the authority to take a final decision on privatization matters. The whole process will end with a negotiation of the selling contract and operation licenses with the successful investor. Terracom was originally founded by American Greg Wyler. In 2003, the Boston-based executive arrived in Rwanda, promising to install fiber optic cables to connect schools, government institutions and homes with low-cost, high-speed Internet service. He signed a contract to connect 300 schools, and later bought 99 per cent of the shares in the state-owned Rwandatel at a cost of $20 million. As of mid-July this year however, only one-third of the 300 schools covered in Terracom’s contract had high-speed Internet service. They were supposed to have been connected by 2006. Rwanda Utilities Regulatory Agency (Rura) fined the company almost $400,000 in June this year for failing to abide by its licensing obligations, failing to present information about its operations and failing to pay several fees. “Rwandatel S.A is hereby declared not comply with its license obligations notably ones related to coverage and roll out plan. Therefore, this company is enforced to comply with its license obligations related to Coverage and Roll-out obligations in Fixed-line services,” RURA said in a June 14 statement. However Wyler claimed that Terracom’s objectives were unrealistic given the technical challenges occasioned by lack of proper infrastructure in the country. He nonetheless said that Terracom had accomplished a lot because in the beginning there were a few people with Internet service and now there are thousands. The Government of Rwanda says the new owner of Rwandatel will have to meet certain objectives underlined in the country’s Vision 2020. The criteria include the capacity to develop the telecommunications sector in Rwanda by improving the quality of services and meeting the growing demand on the market. Ends

National

Phone giants scramble to buy off Rwandatel