Telecoms competition in 2011

Mid last week, while having lunch with my colleagues, we discussed how eventful last year’s intense competition was, within telecoms, and how such competition affected Rwandans in various ways. It so, happened that Tigo Rwanda had just given away a brand new Toyota Fortuner worth Rwf 40 million to its lucky winner.

Mid last week, while having lunch with my colleagues, we discussed how eventful last year’s intense competition was, within telecoms, and how such competition affected Rwandans in various ways. It so, happened that Tigo Rwanda had just given away a brand new Toyota Fortuner worth Rwf 40 million to its lucky winner.

“Tigo is one of the best things that happened to Rwanda last year,” I said, while waiting for my food to be served. I asked my colleague-a reporter who covered the function, about the personal background of the winner of the Toyota jeep. It turned out that the winner is a waiter in one of Kigali’s city hotels.

“But you see MTN is giving back the kind of money that none of the other competitors can give out,” another colleague chipped in. He was referring to Rwf 100 million that is up for grabs courtesy of MTN’s latest promotion.

“Let us not forget that it is due to the very intense nature of the competition that we had calling charges plummeting down to Rwf 3 per  minute  up from those crazy levels charged before Tigo came into the picture,” another colleague added. While it can be said that all these sentiments are true, one thing seems to give rise to all these observations.

Last year’s intense competition determined how Rwandans communicated with their loved ones or did business. Over one million additional Rwandans got connected to mobile telephones courtesy of the competition. The mobile phone usage soured up to over 35 percent, which was a very good measure of the hard work that all the three players put in last year.

While Tigo Rwanda managed to amass over 600,000 subscribers within 12 months of its operations, MTN as voice segment leader surpassed the 2 million mark. It even managed to break the telecoms ceiling by surpassing Rwandatel as data incumbent in the area of mobile Internet provision, according to market regulator Rwanda Utilities Regulatory Agency (RURA).

As the new year started, MTN announced that its revenues had been affected by the new dynamics unfolding within the sector. However, the other side of the coin within the fast changing nature of the telecoms, for MTN, is that MTN has managed to emerge as both indisputable voice leader and big time contender within equally lucrative data segment. This in itself is quite telling. It means that the landscape has indeed changed very dramatically.

It also means that we are yet to see more changes this year. There is a prospect of yet another new player being brought in by RURA. If that happens, then we are most likely to see the competition moving to a new phase.
Naturally, by MTN eating into its data pie, Rwandatel will respond by trying very hard to protect its turf, thereby giving impetus to yet a new wave of competition. One of the things that Rwandatel will most likely do to regain lost ground within data, will be cutting on Internet service, pricing just the way it did with voice last year.

Going forward, one of my wishes is to have mobile phone usage jump above 60 percent mark by end of this year. I know that all the three players are busy plotting how to jostle for more market share. Will MTN maintain its winning streak within both voice and eat into more of the Rwandatel’s data segment this year? Will the new kid on the block Tigo Rwanda maintain its “David vs Goliath” strategy that enabled it to get past Rwandatel to clinch second position, within voice segment, now that it has a new CEO?

While we can only vaguely predict the outcomes, it is only time that will tell how the nature of this intense competition will play out this year. However, one thing is now certain: Rwanda’s telecoms industry can now be said to be truly a fast paced industry capable of setting the tone of transformation in the country.

The author is an editor with The New Times

Ojiwah@gmail.com

 

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