Indian telecoms giant Bharti Airtel plans to invest $100 million in Rwanda over the next three years to become the African nation's third operator.
Airtel's decision to invest in Rwanda comes at a time when a price war is being waged between operators MTN and Tigo, which are competing for customers orphaned by last year's closure of Rwandatel.
Rwanda Utilities Regulatory Agency (RURA) revoked Rwandatel's licence last April, after RURA officials said the telco did not meet its operating standards. RURA requires telcos in the country meet performance targets in terms of investment, coverage, network rollout and quality of service.
LAP Green Networks - a Libyan-owned telco - had an 80% share in Rwandatel, while the former National Social Security Fund of Rwanda had the remaining 20% stake.
Approximately 345 771 of Rwanda's four million mobile phone subscribers were left without mobile services, after Rwandatel's closure, according to RURA.
As a result, MTN slashed its prices by 33% and 52%, respectively, for prepaid and postpaid customers, in a bid to attract abandoned customers.
Now the entry of a third player in Rwanda's telco sector could make the market more competitive, as Bharti continues its African expansion. Rwanda is to become Bharti's 17th market on the continent.
“We believe that Rwanda is an extremely promising market and this launch further strengthens our footprint in eastern Africa,” said the company's chief executive and joint managing director Manoj Kohli.
The company has also paid $15.5 million to take over the cellphone towers formerly owned by Rwandatel in order to have a pre-established infrastructure.
However, Airtel has yet to provide pricing details and it is unclear whether it will try to undercut players such as MTN.
According to RURA figures, at the end of 2011, Tigo and MTN, respectively, had a market share of 35% and 65% in Rwanda's telco market.
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