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It’s a ‘monopoly’ despite increased 4G LTE retailers in Rwanda

Sunday December 13 2015

Despite an increase in the number of 4G network retailers, prices remain the same and uncompetitive for many Internet users, pushing some to say the market is like a monopoly.

Since the launch of 4G about two years ago, business operators are increasingly entering the network retail market. There are seven retailers, including mobile network operators while there is one wholesale service company called Olley Rwanda Network.

According to retailers who spoke to Rwanda Today, customers continue to complain about 4G affordability but prices depend mainly on wholesalers’ prices and, partially they also consider their profit margins and clients’ purchasing power and income.

Grace Karibori, sales executive at Simba, one of new retailers, told Rwanda Today many people sometimes say 4G LTE is expensive, but in her view when one looks at speed and value, it is affordable. She added that their prices depend on the wholesaler.

“The wholesaler determines the price we fix because it is not our product,” said Ms Karibori.

Other Internet service providers (ISPs) also say their 4G prices mainly depend on the wholesaler but they consider other factors to make profit.

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“We don’t set prices,” said Robert Busulwa, marketing and sales manager at ISPA, a retailer. “We purchase, so prices are already set by whoever we buy from.

“We set a profit margin but basing on customers’ knowledge and according to the situation. We don’t want to exaggerate prices as that will make them too high.”
Experts say a liberalised market with an open, competitive environment leads to better prices and service options for users.

According to a report released earlier this year by Alliance for Affordable Internet, an international organisation that seeks to make broadband more accessible, the agreement between the government and Korea Telecom Corporation in 2013, under which the latter is supposed to invest $140 million (Rwf104 billion) to deploy a long-term evolution (LTE) access network over three years, “it is expected that this will lead to 95 per cent of the population being within range of a high-speed mobile broadband network.”

The report ranked Rwanda as having the most affordable Internet in Africa.

However, the report noted that “many have expressed concern regarding this type of deployment model and the possibility that it may deter competition at the retail level and the long-term impact remains to be seen.”

Retailer prices are almost the same, which leads to some observers saying the 4G LTE market is like a monopoly and price are not competitive. For instance, 1GB is Rwf3,800 and Rwf3,900 while 5GB is Rwf17,500 and 18,000 at Simba and G-Max, respectively.

Some retailers say they have introduced new packages that can allow customers “to have many choices and options.”