Rwanda Telecommunications Sector Performance Review 2007

Rwanda
The government plans to decrease the average distance to access a public
phone from 15km to 2km (or a radius of 2km) within the next five
years. In addition, the government has decided that all ICT equipment
(including electrical equipment/generators and solar panels) will be
exempted from import taxes. This is all aimed at increasing ICT usage
and more importantly reducing the cost of ICT-related activities, hence
increasing the affordability of these essential services as we move into
becoming an ICT hub for the region.
Looking further at the initiatives made to address the challenge of rural
connectivity, a company called BCS runs a GSM public payphone network
called Tuvugane (Let’s Talk), launched in April 2004. It was established
with the main objective of bringing mobile communication to rural
communities. It offers per second billing. This project became more successful
than anticipated in terms of revenues collected, as depicted in the
table below. It has over 4 000 payphones and is the only company offering
this service in Rwanda. It buys airtime from MTN and the revenue is
split as follows: Phone partner: 20%; BCS: 13%; MTN: 67%.
According to the distribution manager of MTN Rwandacell, 90% of the
revenue collected is from Kigali, implying that the main objective of
bridging the digital divide has not been achieved. However, there are
other initiatives in the pipeline to address this issue; for instance, MTN
is introducing a project called the “Village Phone” which is to focus on
the rural areas only, in partnership with the Bangladesh-based Grameen
Foundation.
COST OF ICT USAGE
Tariffs must by law be cost-based. Transparency is the predominant control
mechanism. Rules are set out relating to the setting of tariffs and the
Regulatory Board does have powers to intervene. Ongoing tariff control
is confined to the dominant operator.
TABLE 6: AFFORDABILITY OF ICT SERVICES
Affordability Rwanda Low-Income Sub-Saharan
Group Africa
2000 2004 2004 2004
Basket for fixed line 8.4 7.9 6.6 8.5
(US$ per month) residential
Basket for Mobiles 24.8 11.6 13.5
(US$ per month)
Basket for Internet 66.8 45.5 54.8
(US$ per month)
Price of 3-minute call to 11.23 2.45 1.95 2.43
the United States: (US$)
1 Source: World Bank ICT at a Glance
2
2007 Telecommunications Sector Performance Review
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