KIGALI - The Rwanda Utilities Regulatory Agency (RURA), has, for the second time, ordered Rwandatel to meet its obligations or risk losing its operational license.
The second enforcement notice issued by RURA on February 24 follows an appeal by Rwandatel against the first notice which was issued on February 4.
Now the telecom company has one month to “put its house in order” or risk action from the regulatory body.
Rwandatel had appealed against the first notice referring to it as “unwarranted and unjust.”
The new enforcement notice from RURA confirming the first one, gives Rwandatel up to March 31 to implement its licence requirements which include coverage, rollout obligations, quality of services, investment plans and sorting out the financial problems.
On February 22, the RURA board met Rwandatel’s senior managers to discuss the appeal of the company following the first notice.
The regulatory body maintained that Rwandatel has to meet its obligations.
“Rwandatel S.A is hereby required to comply with its license obligations related to
Investments, Coverage, Roll-out obligations and Quality of Services as provided in the
Confirmation Enforcement Notice,” read the notice signed by Eugène Kazige, the Chairman of the Regulatory Board.
“It will provide a report of its compliance with the said obligations to the regulatory board on or before the 31st of March 2011,”
RURA also asked Rwandatel, a subsidiary of Green Network, which is part of the Libya Africa Investment Portfolio (LAP), to address its “financial difficulties”.
LAP Green owns 80% of the company while the remaining 20% is owned by the Social Security Fund of Rwanda (SSFR).
“Rwandatel S.A shall take concrete actions for addressing its financial difficulties that currently impact on both its operations and the legitimate interests of other stakeholders,”
RURA also maintained that Rwandatel failure to comply “shall result in or bring about further regulatory actions by the Regulatory Board, as stipulated by the law.”
In an interview with The New Times, Regis Gatarayiha, the Acting Director General of RURA, said that among measures that will be taken in case Rwandatel fails to meet its obligations, include, but not limited to, withdrawing its operating license.
“Withdrawing the license is not the only option as it had been reported earlier, but it is one of them,” Gatarayiha said.
“Other alternatives may include financial fines or reducing the scope of the license. We have also advised them to solve their financial problems. If you compare liabilities of the company and the financial status, it does not add up,” he added.
However, Rwandatel insists the enforcement notice was uncalled for since the company has almost fulfilled part of its obligations.
In an interview, Cleophas Kabasiita, the Corporate Communications Manager, confirmed that indeed Rwandatel received the notice but its management did not agree with RURA because the telecom company believes its network and subscriber base have grown.
“It is a decision Rwandatel did not agree with as we felt it was unwarranted and unjust, especially at a time when the quality of our network has evidently improved,” she said.
“It came at a time when we have increased the number of products on the market and when customer confidence on the company has grown as demonstrated by statistics regarding our subscribers today,” she added.
Rwandatel was privatised in 2007 and LAP Green came up as the best bidder because of its favourable technical and financial proposals.
The Libyan group paid about $100m for the 80% stake.
Lap Green then committed to invest $87m in the initial year and another $177m over five years.
According to statistics from RURA, towards the end of 2010, Rwandatel had 535,710 subscribers, putting it third behind MTN Rwanda with 2.3 million and Tigo Rwanda, a new entrant, with 685,000 users.
Rwandatel’s new troubles come amidst fears that the unrest in Libya could largely affect Libyan Investments on the continent.
Kabasiita however insisted that Rwandatel will not be affected as Lap Green is not a politically affiliated company, but rather a private investment entity.
“It is important to note that Rwandatel Ltd. is a limited entity, not a political entity. It is 80% owned by the Libyan Africa Portfolio which is a company separate from political entities that exist,” she said
“LAP runs other businesses in various business sectors such as the hospitality and oil industry as well as the telecom industry across Africa. We do not foresee any issues as a result of the upheavals in Libya.” Kabasiita said.