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Giants vie for Rwanda ‘s telecom market

October 2, 2008 • Mobile and Telecoms

kagame_Rwanda.jpgFour telecommunications companies have emerged as serious contenders for the third national telecommunications operator license after presenting their bids to Rwanda Utilities Regulatory Agency (RURA) on Tuesday.

Larrycom for Investment, Millicom, Celtel International B.V (now Zain) and Telecel Globe LTD, had faced potential competition from thirteen other companies which bought bidding documents but did not submit their bids.

Four telecommunications companies have emerged as serious contenders for the third national telecommunications operator license after presenting their bids to Rwanda Utilities Regulatory Agency (RURA) on Tuesday.

Larrycom for Investment, Millicom, Celtel International B.V (now Zain) and Telecel Globe LTD, had faced potential competition from thirteen other companies which bought bidding documents but did not submit their bids.

MTN Rwandacel and Rwandatel, the only players in Rwanda’s mobile market are enjoying exclusive duopoly rights granted by cabinet in 2003. But their operational licenses expire by the end of the year.

The government is liberalizing the telecommunication industry and allowing new players into the market and it is set to grant a 15-year fixed and mobile license to a third telecommunications company.

Col. Diogène Mudenge, the Director General RURA, said that technical and financial evaluations for the bidders will be completed by the end of October and the licensing of the preferred bidder is in December 2008 after approval by Parliament.

Prof. Romain Murenzi, the Minister in the President’s Office in Charge of Science, Technology, Research and ICT said that government is strongly focusing on three areas of investment which include voice, data and video.

Murenzi said that the preferred bidder should be able to boost the telecommunications sector in the country through the increase of bandwidth, storage capacity and capacity for analysis.

With the entry of a new player, the competition in the telecom industry is set to increase and hopefully, this will translate into better and faster services for the consuming public.

Currently Rwanda’s mobile penetration is estimated at one million subscribers, around 10 percent of the estimated total population of 10 million. Of this, MTN Rwandacel alone is said to have almost 600,000 subscribers.

But Mudenge said that government is targeting at least two million subscribers for each company, a total of six million mobile users in the country by 2012.

Companies’ profile

Celtel International B.V (Zain): Celtel international is from the Netherlands but in May 2005 it was acquired by Zain, a Kuwait listed company.

And in August this year, the company was rebranded to become Zain. Zain Group now operates in 16 African countries and on June 30, 2008 its market capitalization was $25.8 billion.

Telecel Globe LTD

It is an Egyptian company established by Orascom Telecom, which runs mobile operators in six countries in the Middle East, North Africa and Asia.

It is estimated to have more than 74 million subscribers by the first quarter of 2008 and principal market capitalization of over US$12 billion.

Millicom

Listed on the NASDAQ stock market, it has cellular operations in Asia, Latin America, and Africa. The group’s cellular operations had a combined population under license of approximately 291 million people as of March 2008.

Larrycom for Investment

It is a privately owned Sudanese Company with offshore offices in Dubai, Beirut, and Egypt. It also owns 15 percent Bashair Telecom with the second GSM license currently operated by MTN-Sudan. It also owns 5 percent shares in Sudatel.

Currently, it is estimated to have 4 million subscribers with other investments in mineral and real estate in Egypt, Mauritania and Sudan.

Other companies which expressed interest include, Neu Venture Group LTD, France Telecom, ADC Financial Services-a German consortium, Econet Wireless International and MTS and Black Eagle Investment.

Others were Smile Telecoms Ltd, Vitel Holdings Ltd, Africa Digital Investments, Forward Venture, Vivacell Africa Ltd, Easy Mobile Communication Ltd and Essar Communications Ltd.

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