Rwanda Telecommunications Sector Performance Review 2007

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Rwanda is being used by numbers of providers. While the main telecommunication operators such as MTN are complaining about what they call abuses, the main Internet Service Provider Terracom is also complaining against MTN for blocking IP traffic. ACCESS AND AFFORDABILITY GAP BETWEEN URBAN AND REMOTE AREAS Previous studies, including the household survey made in 2004 and the current data available from the major telecommunications companies, reveal the disparity of the level of access between urban and rural areas. As an illustration, the current MTN Network is estimated to cover 75% of urban areas and main roads in the town. Remote sites outside the above geographical locations are not yet covered. Estimated penetration of mobile is 60% in the capital city of Kigali and 40% for the rest of the country. There is a need to expand network coverage as well as increase penetration, especially in the areas that are relatively populated with little economic activity that can integrate communications services in their strategies and daily businesses. Traditional fixed services over copper or wireless have declined over the past ten years. Decline is likely to continue over the coming years. The only possible alternative will be the introduction of the Voice over Internet Protocol (VoIP) in addition to wireless local loop. Appropriate technologies such as solar energy, as well as wireless local loop through WiMax or Wifi could be useful in remote areas that have suffered from the lack of basic infrastructure such as electricity and connectivity, to have faster access to communications. The introduction of VoIP in remote areas can only succeed if the telecommunications market is restructured with a clear separation between network infrastructure providers and service providers. The proposed segmentation of the market could therefore allow either small-scale private or community service providers to enter into the market, especially in the areas where the major telecommunications companies are not likely to operate as service providers. The above scheme will require review of the regulatory licensing regime and will bring in provisions to support and facilitate the establishment of small-scale enterprises in remote areas to provide a range of services like voice, data and other related applications to promote the creation of an information-based society in underserved areas. The financing mechanism, one of the major challenges, has to be studied carefully to ensure that the cost of infrastructure investment as well as its operational cost will allow a service pricing scheme that is affordable and sustainable over time, despite the withdrawal of external financial support. The main and initial source of funding is obviously the Universal Access Fund 2007 Telecommunications Sector Performance Review 27
Rwanda (UAF) that is contributed by the telecommunications companies. The UAF could be complemented to some extent by a low interest loan from any development bank such as the Rwanda Development Bank (BRD) or Micro Credit/ Micro Finance Banks. As Table 8 demonstrates, affordable telecommunications services are critical to developing countries in general and sub-Saharan African countries in particular. A recent study carried out by MTN group has shown a correlation between the number of subscribers and GDP of a given country. A close look at the graph below reveals that the lower the GDP of a given country the lower will be the mobile penetration. However, a country like Guinea, whose GDP is lower than that of Rwanda, has a high mobile penetration level. In the case of Rwanda, only 10% of the population lives in the urban area and 60% of the mobile subscribers are in the urban area. The implication of this is that the mobile penetration is only 3% country-wide, which is the lowest in the region. TABLE 10: TELECOM MARKETS IN DEVELOPING COUNTRIES: WHERE DO UGANDA AND RWANDA STAND? MOBILE SUBSCRIBER BASE AND PENETRATION Source: MTN Rwanda The Government is undertaking various projects that will solve these challenges. The following section details the major projects that are being carried out both in the public and the private sectors to address the access and the cost of usage issues. 2 Source: www.mcel.co.mz 28 2007 Telecommunications Sector Performance Review
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Rwanda Telecommunications Sector Performance Review 2007

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