Airtel joins the fray as tight competition beckons

The battle lines have been drawn. A telecoms rivalry the type of which was perhaps last witnessed in Rwanda during the launch of second telecom operator, Tigo, in 2009, is back. On Friday, Airtel made a statement of intent – and rivals MTN and Tigo are unlikely to observe passively.No sooner had Airtel officially launched its entry into the local telecoms market than vendors in Remera, along the Airport Road, and in other parts of the city, were clad in the company’s bright red colours, with MTN three-piece jackets on top. Asked why they had done so, one of the boys joked, “vendors will remain a bit confused over the next few months.”Picking up from their tagline, ‘get talking’ Airtel promised to keep up with what its owners promised after acquiring the license last year. All signals show the company, a subsidiary of Bhart Airtel, will boldly take it to their rivals.Airtel would bring world class and affordable services to clients in Rwanda as one way of adding value to the economy, declared Manoj Kohli, Chief Executive Officer (international l) and joint Managing Director Bhart Airtel.He was speaking at yesterday’s launch at the firm’s headquarters in Remera, Kigali. Kohli disclosed that ‘Airtel Money’ (a money transfer service) was expected next May, which he said would help boost financial inclusion, especially for the rural poor. As the giants fight for a slice of Rwanda’s telecom market, users are expected to benefit from reduced call rates. Calls on the Airtel network cost Rwf20, while cross-network calls cost Rwf60. The company charges Rwf10 for short messages within the network and Rwf20 across other networks. “They stand a good [market] chance when it comes to linking up the region. Of the five east African countries, it’s only in Burundi, where they have not set foot. But they compensate for that by being in DR Congo,” commented, Allan Brian Senyonga, a Kigali resident. The new entrant has the “Friends and Family Pack” which has 5 Sims, where subscribers can make calls at Rwf10 and send sms at Rwf5.They come with a range of scratch cards, costing between Rwf100 and Rwf5000. Customers buying airtime yesterday were given 100 per cent bonus, while those who bought SIM card at Rwf500 received a bonus of airtime worth Rwf300.Until yesterday, the cheapest scratch card on the market cost Rwf300 for Tigo.Prior to Airtel’s arrival, TIGO was the cheapest in terms of international calls when considering the highest international rate, according to a recent report from the regulator, Rwanda Utilities Regulatory Agency’s (RURA). But local giant MTN emerged as the cheapest when considering the average tariff for all international destinations.TIGO is said to be more expensive in terms of normal tariff for both on-net and off-net tariff, though the on-net tariff has never been applied due to its promotional tariff of Rwf10.Following interconnection rates review by RURA, MTN subsequently reduced its retail off-net tariff, from Rwf90 to Rwf60 per minute , for prepaid customers, and from Rwf126 to Rwf60 for post-paid customer, which is a 33 per cent and 52 per cent reduction for prepaid and post-paid customers, respectively.Still until Thursday, TIGO was still the cheapest in terms of both normal tariff and promotional tariff on on-net sms (Rwf10 for MTN and Rwf3 for TIGO).Airtel says it is keeping up with the tune their owners promised last year.On Friday, the day of the launch, the firm conducted a number of things to popularise its brand. T-shirts, phones with double Sim cards were also distributed free of charge amid loud music. “Hello Rwanda,” one of its adverts read.The company says it plans to invest over US $100 million in three years to operate second generation (2G) and third generation (3G) mobile services, as well as fixed line, and a high speed broad band internet connectivity, with a vast presence in the countryside.Rwanda’s mobile penetration rate increased by 3.4 per cent in December 2011, to 41.6 per cent, up from 40.2 per cent in September, the same year, according to latest telecom sector performance report from RURA.The figures represent 25 per cent increase from December 2010.The overall target for mobile telephony by the end of 2011 was 3,730,102 but it has already been surpassed by 19 per cent, RURA says.As of December 2011, the only players in local mobile telephony were MTN Rwanda and TIGO Rwanda Ltd. Airtel once again increases the number of local telecoms operators to three.Last year, the government withdrew the mobile operating license of Rwandatel, a subsidiary of Libya’s LAP Green, accusing it of failure to meet its contractual obligations.Clients will be hoping to reap from the new competition.

National

Airtel joins the fray as tight competition beckons