Madhvani venturing into Rwanda’s telecommunication

The Madhvani Group plans to invest between $8m to $10m (Frw4.3b to Frw5.4b) in laying Internet infrastructure countrywide.

The Madhvani Group plans to invest between $8m to $10m (Frw4.3b to Frw5.4b) in laying Internet infrastructure countrywide.

Through its subsidiary, Augere Rwanda Limited, the London based firm will provide broadband Internet services, targeting the underserved rural areas of the country.

"We are to provide Internet and not voice services," M.S.V Rao, the General Manager of Kabuye Sugar Works said on Wednesday last week.

Kabuye Sugar Works is another subsidiary of the Madhvani Group of Companies.

However, Rwanda Utilities Regulatory Agency (Rura) the national regulatory agency is yet licensed Augere Rwanda. If granted, the subsidiary will be Rwanda’s forth Internet Service Provider (ISP) after MTN Rwanda, Rwandatel and Artlel.

The introduction of Augere Rwanda is expected to bring down internet costs.

Rao said that the group is targeting rural areas because they are underserved limiting economic development.

He said that they have already applied for a license from Rura and are only waiting to be allocated a frequency, before they start operations.

However The New Times could not verify the details of Augere application as people in Rura were cagey.

Rao said venturing into telecommunication was part of their business plans to diversify their investments and support the group’s investment interests in Rwanda, a country he described as fast growing economy and with predictable business environment.

Internet ‘untapped’

With government’s plan to transform Rwanda into a knowledge based economy through Information Communication Technology (ICT), investing in the internet services is timely.

Scan ICT Baseline Survey done by the National Institute of Statistics in 2006 indicates that local community usage of internet was below average compared to UN Agencies and other Non Government Organisations (NGOs) operating in the country.

According to the statistics, only 14 per cent of the private sector uses internet whereas the public sector internet usage stands at 12 per cent.

The survey found out that whereas all UN systems use internet in Rwanda, only 26 per cent of NGOs use internet in the country.

About 45 per cent of the public sector has websites, the percentage within the private sector stands at 25 per cent. All UN systems in Rwanda have websites up and running. And about 65 per cent of the NGOs have websites, according to the survey.

Connection fees high

Low internet usage of internet in the country is attributed to high subscription charges by the only three internet service providers (ISPs) in the country.

To subscribe to MTN internet, two years ago, one had to pay Frw130, 000 for an internet card plus Frw20, 000 monthly fees. But they have reduced to Frw110,500.

At Rwanadtel, an EVDO card for only specialised computers and laptops was at Frw150, 000 with 400Kbps speed. Monthly subscription was $63 (about Frw35, 000).

Rwandatel Asymmetric Digital Subscriber Line (ADSL) used to be at Frw50, 000 monthly. These were the highest tariffs in the region.

Reducing costs

Rita is building a national ICT backbone that will lower costs of internet to $10 (about Frw5, 500) subscription per month.

The Rwandan government jointly with MTN is trying to develop the Kigali Metropolitan Network (KMN), the faster optic fibre highway, faster than the common wireless, Vsat and dialup connection currently being used.

KMN also referred to as The Kigali Ring and is a project laid around Kigali that will provide backbone to ISPs.

KMN is a small part of the big project ‘back born cable’ that will link Kigali to all districts across the country.

Once the back born cable is laid, the government is considering it as one of the ways that will increase internet usage.

ISPs will be tapping from this faster and cheaper fibre optic highway to sell to people’s homes and businesses at relatively lower prices. The project will eventually be rolled out to other major towns like Butare, Gisenyi and Cyangugu, then to other parts of the country.

The government has injected a lot of money in this highway to host ISPs in the country cheaply so that they can also charge lower to their clients.

Romain Murenzi, ICT minister said the government is also interest families to own computers through acquiring bank loans. With the initiative, every home would own a computer at $500 about (Frw271,945) that they would pay for in installments.

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