KIGALI - The head of the Rwanda Utilities Regulatory Authority (RURA), Regis Francois Gatarayiha, declared yesterday that the revocation of the Rwandatel’s mobile license is permanent.
The decision taken on Monday in accordance with article 57 of the law no 44/2001 of 30/11/2001 governing telecommunications in Rwanda, clears any notion that Rwandatel can, after putting right the non-compliance issue, regain its license.
“There is no hope of regaining the license. The decision is final. We have revoked it and this is permanent”. Gatarayiha said, during a news conference at the RURA headquarters.
This leaves two operators; Tigo and MTN, in the market which the regulator still insists lacks competition.
Hundreds of employees are bound to lose their jobs.
Over 320 Rwandans, five Libyan expatriates and 11 distributors countrywide are employed by Rwandatel.
The switching off of the network will mean that Rwandatel has to lay off employees and retain a few who will operate the fixed telephony and internet services, which the company will provide using a different license.
“The fixed telephony and internet license shall remain active and operational as usual,” RURA announced.
By Tuesday evening, all employees at the customer care centres in the city were thinking of the next step, while others had already abandoned work in search of other jobs.
The regulator noted that the exit of Rwandatel won’t affect the market and the targeted penetration percentage of 60% by 2012, which is now at 36%, the lowest in the region after Burundi.
“The penetration is determined by the competition in the market, not the number of operators. We can have two operators, and how they strategize to reach out to new subscribers determines penetration. What we have been having is three operators competing for same subscribers,” Gatarayiha said.
Gatarayiha noted that Rwandatel’s subscriber base had dropped from 535,710 to 345,000, by February this year following Tigo Rwanda’s subsidized call rates.
This comes at a time when the industry is facing setbacks in interconnectivity costs which stand at Rwf 40, forcing operators to hike call costs.
“Pricewaterhouse Coopers, funded by the World Bank, is currently conducting a study to see how much operators are spending on interconnectivity,” Gatarayiha said.
The report, which is expected to be out in May this year, will help the regulator determine how to cut interconnectivity costs, which will result in reduced call charges.