Rwanda: Rwandatel, Huawei in $35m Deal

Rwandatel, a landline telephony and Internet Service Provider has signed a US$35million deal with Huawei Technologies based in China to expand network in Rwanda.

According to a press release from Rwandatel the deal signed last week in Kigali will facilitate a nationwide rollout of new infrastructure that will support Rwandatel’s Global System for Mobile communication (GSM) and 3G Universal Mobile Telecommunications System(UMTS) network services.

Rwandatel’s partnership agreement with Huawei Technologies, a private high-tech enterprise and a global leader in providing next generation telecommunications networks, based in Shenzhen city, South China, seeks to help Rwandatel revamp its landline network and replace its Public Switched Telephone Network (PSTN) with a New Generation Network (NGN) to attain a strong network.

The deal is expected to accelerate Rwandatel’s GSM to cover most of the inhabited areas and roads with the 3G Universal Mobile Telecommunications System (UMTS) covering most of the urban centres in Rwanda.

Huawei Technologies is the largest telecom vendor in China’s telecom market and have already won trust from over 300 telecom carriers around the world. Its products and solutions serve over 90 countries, as well as 22 of the world’s top 50 operators.

In 2004, its contracted sales reached US$5.58 billion, an increase of 45% year on year.

In the same year, the company’s international sales hit $2.28billion. Huawei Technologies now operates worldwide with 55 branch offices in nine regions worldwide.

It has set up several research institutes in Dallas and Silicon Networks Valley in USA, Bangalore in India, and Stockholm in Sweden, Moscow in Russia as well as Beijing and Shanghai in China.

The signing of this deal comes two months after the acquisition of Rwandatel by LAP Green Networks, a subsidiary of the Libyan African Portfolio (LAP), an arm of the Libyan Government.

LAP Green Networks specializes in acquiring and managing networks across Africa and is currently present in over five countries and expanding. LAP Green Networks now owns 80% shares in Rwandatel while the remaining 20% stake belongs to Social Security Fund of Rwanda (SSFR).

LAP Green acquired 80% stake in Rwandatel by paying $100illion and promised to invest other $300m in fifteen years in the national telecommunication set up. During the signing agreement, LAP Green pledged to spend $87m in its first year of operations in Rwanda.

Rwandatel, a formerly state owned telecom company that was founded in 1993, had in 2005 been privatised to Terracom Communications, an American IT provider on the cost of $20million equivalent to 99% stake.

Terracom Communications was owned by Mr. Greg Wyler. The deal went sour with government accusing Terracon of failing to deliver its commitments.

The government of Rwanda later in 2007 bought back Rwandatel from Terracom Communications and sold it to LapGreen Networks to revamp the sector.

“The contract between Rwandatel and Huawei is only the first amongst many to come,” the release reads in part, adding that in the following weeks, Rwandatel, will be signing contracts worth over $40million.