MTN, TIGO reaping from Rwandatel misery

  • By Saul Butera
  • April 09, 2011
Customers lining up for TIGO SIM cards (Photo T. Kisambira)

MTN Rwanda and TIGO Rwanda are reaping heavily following Monday’s announcement by Telecom regulator, Rwanda Utilities Regulatory Authority (RURA), that it has withdrawn Rwandatel’s mobile phone license.

RURA’s decision, which will be effective midnight Friday April 8, means that Rwandatel’s network connection for mobile and 3G data will be switched off, driving back the country’s mobile phone market into a duopoly of MTN and TIGO. 

By this, subscribers will not be able to call, use their lines to receive or surf the internet.

In a swift response, MTN Rwanda has started to offer free SIM cards with Rwf500 loaded airtime.

MTN’s Senior Marketing Executive, Yvonne Makolo, told Business Times in a phone interview that the company  is trying to facilitate Rwandatel subscribers to stay connected.

“With this service, we require clients to come with their Rwandatel SIM cards so that we can offer them with new MTN lines. We are also able to transfer contacts from old Rwandatel lines to the new MTN numbers,” Makolo explained.

She, however, declined reveal the number of SIM cards transferred so far, saying it will be announced soon.

So many Rwandatel customers were last evening flocking MTN and TIGO outlets to swap their mobile phone numbers, according to a survey by Business Times.
Latest figures from RURA indicate that Rwandatel has 345,771 mobile subscribers making it the third operator after MTN Rwanda with 2,587,694 million and TIGO Rwanda which has 692,950.

TIGO’s Marketing Manager, Nina Ndabaneze, said the operator is preparing a huge offer to former Rwandatel SIM card holders, which will be on the market soon.

“We are not offering free lines now but we have a good offer to Rwandatel subscribers and it will be seen on the market very soon,” she explained.
Rwandatel is the country’s oldest telecom company. If privatised, as it is highly anticipated, it will be the third time the company has changed ownership since 2003.

Rwandatel is owned by LAP Green which has 80 percent stake in the telecom company while the Social Security Fund of Rwanda (SSFR) holds the remaining 20 percent.

In 2007 Lap Green committed US$100m for the financial proposal to acquire Rwandatel, which was initially owned by Greg Wyler’s Terracom before government repossessed it.
LAP committed itself to invest US$87 million in the first year, and another US$177 million spread over five years from 2007, but, failed to meet their license obligations, according to RURA.

Greg Wyler acquired 99 percent shares in Rwandatel in 2003 for $20 million.  Four years later most of the promises and dreams made by Wyler had failed to materialize.
In July 2005 the rosy relationship was not about to continue.

Terracom announced a share-swap deal with telecommunication giant GV Telecom Ltd, with reports indicating that after the swap - operations would switch from Terracom’s unique CDMA system to GSM.
Also in 2005, the government fined Terracom nearly $400,000 for failing to comply with its licensing obligations, including failing to provide information about its operations and failing to pay several fees.

Industry experts say that the move by RURA to revoke Rwandatel’s mobile phone licence could possibly hamper the regulator’s target to attain six million mobile phone subscribers by 2012.

Major highlights

Rwandatel was Rwanda’s sole telecommunication company before The 1994 Genocide against the Tutsi, operating fixed line service

In 2003, Greg Wyler’s Terracom bought 99 percent shares in the national telecommunication company at US$20m

In June 2005, Government fined Terracom US$400,000 for failing to comply with its license obligations

In October 2007, Government and LAP Green signed a takeover agreement for Rwandatel

In December 2008, Rwandatel launched 3G, GSM

In January this year, RURA issued Rwandatel with the first warning and a month later the regulator issued a second compliance notice

April 4, 2011 the regulator revoked Rwandatel’s  mobile phone licence


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