The latest events unfolding in Tripoli must have sounded as very good news for Rwandatel’s rivals MTN and Tigo within the local telecoms sector. To be precise, it must be very tough right now being CEO of Rwandatel.
Apart from the issue of the parent company Lap Green of Libya wading through rough waters, local competition has steadily eaten on Rwandatel’s core business and as the year opens up rival operators are further raising the stakes by positioning to take up more market share.
It has not escaped analysts of the local telecoms sector that this year’s intense competition by the three operators will focus more on the data segment than has been the case before.
This segment of the market is taken as Rwandatel’s key area of business. The implication is that, with reports of political stability under serious strain in Tripoli, it thus means that, naturally, Rwandatel’s rivals must be plotting to move in for the kill within the local data segment especially in the event that a change of guard in Libya comes to pass.
That being the case, it can be said that MTN’s steady gains within data must be giving Rwandatel’s CEO sleepless nights as the year opens up.
MTN has been seen as a voice leader but of late, it has moved in steadily to shore up its data business following heavy investment in data infrastructure rollout for the last three years or so.
Then there is MTN’s highly anticipated Initial Public Offer (IPO) this year, the second in Rwanda’s entire corporate history. “The implications of MTN being the first company within the local telecoms sector to undertake an IPO is varied , especially when one talks about the critical issue of corporate governance by the sector operators.”
Meaning that, if done successfully, MTN’s IPO , will mid wife it to a level whereby the gruelling process of listing its stocks within the Rwanda Stock Exchange will further reinforce its standing as the undisputed leader within the telecoms industry.
While MTN has plainly said that it intends to gobble up more market share in the lucrative data segment that used to be Rwandatel’s preserve, the latest events in Tripoli that puts Lap Green as owners of Rwandatel in a particularly awkward and by extension a rather shaky position, must sound as very good news to MTN.
Even prior to that, the latest international news on riots rocking Tripoli, Rwandatel has been in the local news for the wrong reasons.
It started when market regulator, Rwanda Utilities Regulatory Agency(RURA) announced that Rwandatel as a telecoms operator had lost out to both the new kid on the block Tigo within the voice segment and to MTN within the data segment.
Then RURA followed recently by slapping Rwandatel with an enforcement notice threatening to cancel its licenses on account of alleged failure by Rwandatel to deliver on its investment obligations.
RURA’s serious concerns means that Lap Green stood accused of investing less than half of over $100 million it pledged to plough into Rwandatel.
RURA’s enforcement notice, hotly contested by Rwandatel, however, puts Rwandatel on glaring spot light. RURA’s second enforcement which was issued before end of last month, requiring Rwandatel to comprehensively respond before end of this month has put the CEO of Rwandatel in a very tight corner.
Regional media gave reports purporting that most of Lap Green’s businesses, are technically insolvent with the possibility of their collapse no longer being a far-fetched scenario-should the Tripoli money tap dry up.
Reports went further to indicate that Lap Green has been kept in operation through regular cash injections from Tripoli.
Which brings back the issue of Rwandatel’s current ownership. Are we on the verge of witnessing Rwandatel’s third sale? The uprising in Libya has opened a debate across the region about whether Lap Green companies can survive.
The author is an editor with The New Times