Libyans enter race for Rwandatel

[tolibya]

By KEZIO MUSOKE DAVID
Special Correspondent
Lap Green Networks, a Libyan company that recently bought out 69 per cent of Uganda Telecom (UTL), is among the six companies bidding for Rwandatel.

Rwandatel announced recently that 70 per cent of its shares will be sold by the end of October.

Rwanda’s telecom industry is dominated by MTN Rwanda.

The sale comes only weeks after the Rwandan government annulled its contract with Terracom, for the promotion of Rwandatel, accusing it of not honouring terms of its contract.

The government has emphasised that eligible bids must fulfil at least 80 per cent of the requirements established by a ad hoc committee created by the Minister of Finance and Economic Planning.

The six bidders include telecoms giants Vodacom Group of South Africa and Celtel — Africa’s third-largest cell phone company by subscriber numbers. Others are V-Tel Holdings of Jordan, Bit Map Ltd of Singapore and Rwanda’s R-Com.

Sources said if Lap Green won the bid it would operate a borderless network between Uganda’s UTL and Rwandatel.

Lap Green is owned by Libya Africa Investments Portfolio for Africa, a consortium set up to reorganise the interests of the Libyan government on the continent.

The company, which has invested $4 billion in cash and owns $3 billion in assets, also owns Mali’s premier telecom company, Sahelcom.

During the launch of the bidding process last week, Rwandatel said, “We are looking for a strategic investor with the capacity to improve the quality of services and meet the increasing expectations of the telecommunications market in Rwanda.”

The Rwandan government said in a statement that the new owner of Rwandatel will have to meet certain objectives outlined in the country’s Vision 2020.

The Grameen Foundation, which partnered with MTN Rwanda to create the MTN Village Phone project, says that Rwanda has a rural teledensity of only 5 per cent. A study carried out by Research ICT Africa also shows that Rwanda has the second highest mobile call tariffs in Africa after Ethiopia.

While the cost of calls from mobile to fixed lines is prohibitive, according to the International Development Research Centre, MTN Rwanda’s subscriber base is four times that of Rwandatel, giving it a virtual monopoly.

MTN controls a market share of 95 per cent in a population of over 8 million Rwandans.

The company boasts of over 486,000 subscribers, according to the reviewed interim results for the six months ended June 30, 2007.

Of the six bidders, only two have profiles to match that of MTN Rwanda. Vodacom and Celtel both have regional interests in sub-Saharan Africa.

Vodacom provides 3G GSM services to millions of customers in South Africa, Tanzania, Lesotho, Mozambique and Democratic Republic of the Congo.

The Vodacom brand is also a 50 per cent joint venture investment with UK mobile firm Vodafone Group Plc.

The same company owns a 40 per cent stake in Kenya’s Safaricom, which has a subscriber base of 7.6 million out of the estimated 10 million subscribers in the country.

Celtel, which is owned by Kuwaiti-based Mobile Telecommunication Company, operates in 15 African countries, with a “One Network” coverage across six countries, including Kenya, Tanzania and Uganda. The One Network coverage allows subscribers to make calls at local rates and receive free incoming calls.

Both Celtel and Vodacom subscribe to the $235 million project to build a fibre-optic submarine cable, off the eastern seaboard of Africa, a project that the International Telecommunications Union calls the “missing link” between 21 East and Southern African countries and the rest of the world.

The project is meant to reduce international connectivity costs by two-thirds.

Source in Rwanda’s telecom circles say that MTN Rwanda is planning to forge a regional free-roaming zone with Safaricom of Kenya.

According to the sources MTN Rwanda’s chief executive Themba Khumalo and his Safaricom counterpart Michael Joseph met on the sidelines of the annual GSM Conference in Nairobi recently and discussed the prospects of the connectivity.

With “Connect Africa,” an ITU-sponsored communications summit set to be held in Rwanda next month, observers say the bidding process for the new player in the Rwanda telecom market has to be done in line with the standards set by ITU.

At this summit, heads of state will have to make key decisions on the regulatory environment in order to attract business leaders, some of who could include such bidders.