Telecom sector: Who’ll stay afloat?

As the global financial crisis continues to bite, all eyes are on Rwanda’s telecommunication sector to see how they manage balancing between getting as many Rwandans connected as possible and making profits. The challenge is huge. According to the government’s Economic Development and Poverty Reduction Strategy (EDPRS), Rwandatel, MTN Rwanda and now TIGO shall have to connect 6 million Rwandans. Latest figures indicate that MTN which is the market leader, 10 years in the market, now boasts of 1.4million subscribers. Rwandatel, following the change of technology late last year reports close to 300,000 subscribers and a daily clientele growth of 3,000 subscribers and a 20 percent market share. Millicom International, which was awarded a $60 million operation license in November last year raised many people’s expectations when it promised to launch as soon as possible. The company is yet to show they mean business. The government has done its part—leveling the battling field by enacting the telecom law, establishing and streamlining the efficiency of Rwanda Utility Regulatory Authority (RURA), liberalizing the telecom sector and offering subsidies to ICT equipment. My question is: If it has taken MTN 10 years to connect 1.4 million people, can the three companies convince us they can connect 4 million Rwandans in three years (EDPRS framework), given the prevalent turbulences in the market with challenges like the global financial crisis, inflation and so on. Recently government sent warning signals to CEOs of the two leading telecom companies when the Premier Bernard Makuza hosted them and among the areas of discussion challenged them to improve their respective networks across the country. Here is an outlook of how each player is doing from an independent eagle’s eye. Rwandatel At the launch of the GSM technology late last year, we all got excited hoping for the biggest. We all thought MTN’s dominance was over. I remember the chat I had with the company marketing manager then Victor Kinuma he told me to “watch this space”. I have since had my eyes glued to the skies but nothing convincingly big is happening. When I interviewed Patrick Kariningufu, the CEO in January this year he said, “With GSM technology, we have a lot of products in the pipeline….we are putting every technical bit together to launch blackberry in about 2 months. We are busy mounting repeater stations allover the country; before end of January 2009 we shall start launching in the countryside in mega roadshows. We are seriously pushing for EAC roaming. In Uganda we’re already on and we are meanwhile working on technicalities and signing contracts which should be complete by end of January (2009). The fact that I’m part of this market but I highly doubt if there has been any mega roadshow in the countryside or if there has been any launch of blackberry. A few days ago, Rwandatel launched a Rwf 10,000Frw handset and generously gave subscribers 30 days of unlimited free calls. To me, these are baby steps for as long as the company has not yet launched in the countryside as it promised. MTN Rwanda As pioneers of mobile telephony in Rwanda, and now a decade in operation, I think the company’s subscribers should be enjoying better quality services and a wider and more reliable network. When Themba Khumalo, the former CEO of the company was assuming office over 2 years ago, I had a one on one with him and among the promises he made was expanding the network. In fact he said the company would inject over $2million (about 1.1billion) in building a 100 percent network coverage during his tenure. Early this year, in an interview with the then MTN Chief Finance Officer Anthony Masozera, he said 112 base stations were added during 2008 bringing it to a total of 282. Unfortunately Themba’s 2-year tenure has been the most troubled in terms of quality of network. More than often, subscribers are much concerned about reliability. Although hundreds of apologies were run in the local press it did not, in any way, save the company’s image. TIGO Millicom International was awarded a $60 million operation license of 15 years. Millicom, owns the TIGO brand. This brand operates in DR Congo and Tanzania as well as several countries in west Africa. While the country is yet to launch in Rwanda there are plan to launch the same brand in Uganda and Kenya. It is now seven months since the license was awarded, and there’re still no vivid signs of launch here. Maybe it is time RURA stepped forward and started asking our telecoms some really tough questions? This opinion was written by an independent communications consultant and business analyst