Playing for time, the Rwanda telecom game

For a country that has invested so much in communication infrastructure, Rwanda has a weak regulatory system and the sector is just drifting. The main player MTN is simply too powerful to be regulated and makes its own rules, numerous attempts to create a level playing field have been obstructed, delayed, or ruled out altogether.
Rama Isibo
Rama Isibo

For a country that has invested so much in communication infrastructure, Rwanda has a weak regulatory system and the sector is just drifting.

The main player MTN is simply too powerful to be regulated and makes its own rules, numerous attempts to create a level playing field have been obstructed, delayed, or ruled out altogether.

The latest attempt to create healthy competition was to have number portability, by shifting your number across other networks.

This was put on hold by the regulator because the mobile penetration is only 36 percent, way short of the 60 percent MTN had asked for. 

Anyone using MTN has noticed that the cost of calling is going up, and interconnectivity charges make it expensive to call across networks.

MTN is not the villain here, they are merely protecting their market share but in so doing, they are killing the very market they have a firm grip on.

No company with a 70 percent + market share has ever given it up voluntarily, but if RURA, our all-encompassing regulator has been weak and cannot stand up to MTN, then it falls for all their delaying tactics.

It has failed to reduce inter-connectivity charges, failed to enforce SIM registration, and failed in every other aspect.

 MTN-Rwandacell is a uniquely Rwandan success story. It was set up in 1998 and was one of MTN-South Africa’s first forays into a foreign market.

Most of the capital was raised locally but technical support and equipment came from outside.

For years, MTN made a loss and many can remember the bad old days when a call cost a dollar a minute. MTN had the perfect brand to the market, simple, colourful, and easily adaptable to the local scene.

MTN over the years has developed an efficient marketing and distribution network. That means you can buy airtime anywhere in Rwanda no matter how far away.

 On the flipside, MTN is unlike Rwandatel, which has died and been resurrected more times than I care to remember. Rwandatel has a good basic infrastructure and for long provided the backbone for the internet in Rwanda but is always thought of as a utility and not a business. 

They always lost their best managers and engineers to MTN and now TIGO. Right now, we are waiting for the next operator’s licence to be issued but how can we trust RURA when everyone saw the last tender badly botched.

LapGreen had a bad record with U-tel in Uganda. They came promising the world of investments in hotels and real estate. A technical bid must stand alone and not be part of a wider promise.

 Along came TIGO, with deep pockets and a four-year plan to break-even. The inter-connectivity fees make it hard to call MTN users; even SMS’s are delayed between the networks.

So, TIGO decided to just create a huge internal network where it is almost free to call between users.

They don’t want to replace MTN but to work alongside it, they sell double-SIM card phones making it possible to have two lines.

Number portability cannot be attained until we reach 60 percent penetration and all simcards are registered, which buys MTN time at the top. This is all a lie, depending on which figures we use.

 Rwanda has some 3.5m users, and RURA computes this as 35 percent of the population. However, 50 percent of Rwandans are under 18 years and if you take the adult population or 15 years and over, then it translates to 68 percent already.

RURA chose to count every man, woman and child and came up with 35 percent, so progress can wait another four years. For us to attain 60 percent, we need 50 percent of all children to have mobiles and that will not happen soon. Most adults in Rwanda either own a mobile or can be reached through one, so why the delay? 

 When RURA next issues a licence, it should issue two licences, to make it four players but not the “Cold War” situation of two battling networks.

Maybe the old Rwandatel should be split in two, with one side specialising in data services but also providing calls and the other being a mainly voice-based network. RURA has to start thinking of how to reduce the costs of calling for the customer.

 We also need an independent Consumer Rights group to defend the rights of users from the big telecom companies. Above all, we need fair competition, we all knew RwandaTel would fail because the sector and rules were unbalanced. Let us not waste time and money again.

ramaisibo@hotmail.com

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