According to Millicom, Rwanda will become the company’s 8th country of operation in Africa. Millicom already operates in DRC and Tanzania giving potential to create synergies between the three businesses over time.
Millicom International Cellular S.A, a global telecommunications company, yesterday announced it had won the third national mobile license, beating competition from Telecel Globe, Zain and Larrycom-Expresso.
According to a press release by the Luxemburg based company, Millicom has already entered into a joint venture partnership with Marathon Corporation, an established local company with numerous business interests in Rwanda.
Millicon cellular will hold 87.5 percent of equity in the joint venture and the joint venture will pay $60m for the 15 year fixed and mobile license.
The announcement comes a few days after Rwanda Utilities Regulatory Agency (RURA) announced that cabinet had approved Millicom as a preferred bidder and that negotiations about the conditions of the license were to follow.
Col. Diogène Mundenge, Director General of RURA was quoted saying, “Should negotiations fail, we will commence talks with Telecel Globe as the first reserve bidder. Should they fail, then negotiations with Zain will follow, as the second reserve bidder,” he continued.
“However, Zain will have to raise its license fee offer from $45 million (Rwf24.9 billion) to $50 million (Rwf27.6 billion), as the minimum offer set by RURA, if it is to be considered for negotiations.”
Romain Murenzi, Minister in the President’s Office in Charge of Science, Technology, Research and ICT, said government is waiting for communication from RURA.
“RURA is supposed to negotiate with the preferred bidder about the terms and conditions,” he said.
With mobile penetration in the country estimated at nine percent of the projected 10 million people, Millicom says the structure of the mobile industry in the country presents an opportunity to build a business with a significant market share.
The mobile industry in Rwanda has only two operators, MTN Rwanda and Rwandatel, with the former enjoying the biggest market share. Its clientele base is said to be one million subscribers.
Entry into the Rwandan market will make it Millicom’s third operation in the region with two units in the DR Congo and Tanzania, giving potential to create synergies between the three businesses over time.
A statement from Millicom says that, “Rwanda has a well developed road and grid infrastructure and a government with ambitions to continue investments, including in ICT, with the development of telecoms, internet and broadband services in the coming years.”
“Millicom’s license win contribute to this development program,” it adds.
Marc Beuls, President and CEO of Millicom said that that the company was pleased to have been awarded the third mobile license in Rwanda.
“It is a country with great potential for mobile telephony as it is a very densely populated country with an extremely low mobile penetration which will enable us to build out a network quickly and economically, and its strategic position between our operations in Tanzania and DRC offers potential operational synergies,” he said.
He added that, Rwanda will become Millicom’s eighth country in Africa and will strengthen our overall position in the continent which, we believe, will be the fastest growing part of Millicom’s business in the coming years.
Millicom International Cellular S.A. is a global telecommunications group with mobile telephony operations in 16 countries in Asia, Latin America and Africa.
It also operates cable and broadband businesses in five countries in Central America. It’s mobile operations have a combined population under license of approximately 291 million people.