Frankly speaking, the announcement that Bharti Airtel was entering Rwanda’s telecoms industry caught many people off guard.However, it can be said with some level of certainty that, the entry of Bharti is one of the biggest news items of this month of September, if not the entire year.
The events unfolding within Rwanda’s telecoms sector for the last 8 months, can be said to be very dramatic.It provides a curtain raiser of what we should eagerly expect, starting next year. For sure, Rwanda’s telecoms industry will see very heightened competition, the kind that was never seen before, since the sector was liberalized more than 10 years a ago.
The curtain raiser to the new round of competition expected next year, started early this year, when the Libyan crisis sucked in LapGreen Networks, that was majority shareholders of Rwandatel.
LapGreen through, Rwandatel stood accused of failure to honour its license obligations. Rwanda Utilities Regulatory Agency (RURA) , the sector regulator moved with speed to strip Rwandatel of its coveted GSM license.
That action, early this year, set in motion a chain of events that culminated into the surprising and very delightful announcement, that Bharti Airtel was coming to town.
Before the announcement by Bharti, mid this year, a two horse race ensued, pitting MTN, the voice market leader, against Tigo the new kid on the block The tough battle between MTN and Tigo provided insights of how competition is good for this economy.
In the tough contest, Tigo managed to bag more than one million clients in just less than 3 years of its existence in Rwanda.
The moral of this story is that such a feat is providing sufficient proof that it is indeed possible for Rwanda to hit the set target of bringing on board more than 60 percent of its population into the national telecoms networks by 2012,hardly a year away, considering that the current penetration rate is at less than 40 percent.
What is Bharti Airtel going to do in this market? I am very sure that the CEOs of both MTN and Tigo are burning the mid night candle trying to frantically put in a repositioning strategy.
Without doubt, Bharti’s entry will fundamentally change the game plan in the entire sector. For starters, those of us in the media are sensing a lot of excitements coming up from sector players and other stakeholders.
Already, interconnection fees, that was previously a bone of contention by several stakeholders has been slashed providing, further, impetus for levelling the playing field needed to boost penetration.
If what Bharti Airtel did during its entry in Kenya, is anything to go by, then one of the things we should expect, once Bharti launches operations in Rwanda next year, is to engage both MTN and Tigo in the most aggressive price war, that will change a lot of things. Not withstanding its US$100 million war chest, Bharti Airtel will come to town mean and lean, ready to engage its competitors, based largely on its low cost business model as a true third world telecoms trans-national.
It is an open secret that Bharti entered Kenya with a model that shook the country’s telecoms industry to the core. In August last year, Airtel engaged Kenya’s safaricom and other competitors in a bruising tariff wars when it cut rates by more than 50 per cent across all networks.
It sustained this pricing model by opting to outsource non-core functions.
In this upcoming contest between the three operators , customers in Rwanda are going to be the ultimate beneficiaries.
The author is an editor with The New Times