Rwandatel in bullish mood as competition looms

Events in the last one week alone has shown the extent of the bare knuckles wars being fought by the three operators within the Rwandan telecoms industry. So intense has been the turf in the last six months that one of its obvious effects has been a huge growth in new subscriptions which market regulator Rwanda Utilities Regulatory Agency(RURA) pegs at 20 percent. The raging wars have brought over 500,000 new subscribers within the space of 90 days into the country’s telecoms network which is actually a very refreshing outlook. Now as the levers of intense competition shifts to high gear watchers are anticipating subscription to top up at 4 million up from the current 3 million by end this year. If that happens history will have been made within the country’s telecom industry. Further still, by end of the year, the entry of the fourth national operator is bound to change the landscape even more radically. Rwandatel’s response to the RURA report last week that Tigo Rwanda, the new kid on the block, had overtaken it bearing the fact that it is the oldest operator sounded like a huge wake up call to its management. Tigo Rwanda, with barely 20 months of existence in the market has managed to amass 500,000 subscribers much to the surprise of both MTN and Rwandatel. Tigo Rwanda’s guerrilla marketing techniques is premised on its predatory pricing mechanism. This mechanism principally targets Rwanda’s very bottom of the economic pyramid. It is a segment that had been given less attention ever since liberalization of the sector kicked off some 10 years ago. This new focus is credited with Tigo Rwanda’s initial successful entry which culminated into its capture of 5.3 percent of the tele-density that is currently standing at 31.7 of the total population. The most significant response to the Tigo Rwanda’s forays came from Rwandatel just last week. It was the kind of a response that can be likened to waking up a sleepy elephant from deep slumber. In a hurry, Rwandatel announced very deep cuts in its entire tariff structures. Rwandatel announced a massive cut to Rwf 3 per minute for its prepaid customers along with Rwf 500 sim card loaded with Rwf 500 free credit. This kind of new pricing means that Rwandatel is effectively on the war path to at least regain its lost ground within the voice segment. Rwandatel also announced huge cuts on its ‘akanyenyeri’ phone from Rwf8,000 to Rwf5,000, which also comes with 250 complimentary minutes and 300 units of free Short Message Services (SMS), making it the cheapest handset on the market. This move is meant to drive in more subscribers into its network in the coming days especially from its rival networks. Though tight lipped, MTN’s response is heavily anticipated in the next 3 or so days by its 2 million subscribers. If MTN does not march or exceed what Rwandatel did last week, MTN risks loosing out a substantial chunk of its clients through heavy migration to its rival networks. Tigo Rwanda which was considered the underdog until the RURA report surfaced, is actually basking in the glory of pulling the rag from the two big players. Ojiwah@gmail.com

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Rwandatel in bullish mood as competition looms