Members of the Zain group, which operates under the Celtel brand in Africa; Korea Telecom (KT); Orascom Telecom; and an unnamed firm from Israel, have informally expressed interest in a third telecom operator’s license in Rwanda.
The country is set to invite bids from interested companies to provide mobile telephony, as well as fixed lines, to speed up development in the sector. Expressions of interest will be made by the Rwanda government at the end of the month.
Currently, MTN Rwandacell and Rwandatel serve the voice and data market, with the former having the larger market share in mobile telephony and the latter controlling a majority of the fixed-line market.
The decision to introduce a third operator in Rwanda is informed by the need to increase competition in a sector that has long been controlled by MTN Rwandacell with more or less no competition. By upping competition, the government believes it will reach its target of giving 5 million Rwandans access to telecommunication services within the next five years. Rwanda also hopes the move will enhance deeper penetration of ICT services in the country.
KT is South Korea’s top integrated wired and wireless telecommunications services provider. Orascom Telecom operates in six emerging Middle Eastern markets and owns stakes in some African telecoms, like South Africa’s Cell C. Celtel is the only company currently operating in East Africa, with a seamless network in Tanzania, Uganda and Kenya.
Of the four companies vying for a license, KT seems to have an upper hand, given that it is carrying out a feasibility study for the rollout of a national fiber optic backbone.
Romain Murenzi — the minister in charge of science and technology, scientific research and ICTs — said in a statement that preliminary results of the study have shown the backbone to be commercially viable if the 30 districts in the country are linked.
Meanwhile, MTN Rwandacell will be celebrating 10 years of existence in Rwanda this September. The company, which is majority-owned by the MTN group of South Africa, invested US$20 million last year and is investing an additional $30 million this year to widen its geographical reach. MTN’s customer base has increased by 94%, with a total penetration of 7.2 percent or 600,000 subscribers.
Even before a third operator license is granted, competition is coming to MTN in August when Rwandatel is expected to launch its mobile business after sinking millions of dollars into a GSM (Global System for Mobile Communications) network. Currently, the company offers Internet and fixed-line telephony and uncompetitive mobile-phone services based on CDMA (Code Division Multiple Access) technology.