Rwandatel now switches to GSM

Rwanda’s fixed line operator — Rwandatel — has switched from its traditional CDMA (Code division multiple access )-based technology to GSM (Global System for Mobile communications) technology in a move that could see the company’s mobile subscribers increase by over 90 per cent.

With Millicom Telecommunication’s Tigo brand set to open shop in Kigali by the end of 2009, this could mean that the country’s teledensity could also rise from 11 per cent to 18 per cent in just a year.

The launch of Rwandatel’s GSM operations with an investment worth $71 million, in a deal involving Huawei Technologies — a Chinese private high-tech telecom company — means that Rwandatel will now compete favourably with MTN Rwanda, which has operated GSM for over 10 years.

Rwandatel has been operating CDMA technology, which officials say cost the company dearly and trailed behind MTN Rwanda, with only 50,000 subscribers.

CDMA is a network technology that supports less than 20 per cent of the world’s telecom companies with voice communication. On other hand, GSM is a wireless standard utilised by over 80 per cent of the world’s telecom operators.

There are camps on both sides that firmly believe either GSM or CDMA architecture is superior to the other.

CDMA networks all over the world support over 270 million subscribers. GSM on the other hand tallies up its score with over one billion subscribers.

However, both boast of 3rd generation (3G) technologies.

With CDMA, Rwandatel required proprietary handsets that are linked to Rwandatel network only.

The Rwandatel handsets were not card-enabled and, therefore, not user friendly for pre-paid services.

Rwandatel subscribers find it had to upgrade their CDMA phones, as technologically they could not return them back to the carrier for deactivation.

The old phone would also become useless, in case it is deactivated for a new one.

Since Rwandatel’s CDMA subscribers were holding phones that are not card-enabled, they were also finding it hard to roam when travelling within the region because the phones did not have this capability.

On the other hand, MTN Rwanda early this year introduced a roaming product called “Home and Away” in which it partners with Safaricom of Kenya, MTN Uganda and Vodacom of Tanzania.

Rwandatel officials have not ruled out any possibility of a roaming agreement with Uganda Telecom (UTL) since LAP Green — a Libyan consortium that owns 80 per cent of Rwandatel — also has a 69 per cent stake in UTL.

LAP Green has promised to invest $317 million over a 15 years to revamp Rwanda’s telecom industry.

According to Eric Kariningufu, Rwandatel’s director of CDMA, with the newly introduced GSM, subscribers will be required to purchase sim cards like all other GSM carriers and enjoy the liberties that come with sim card technology.

Sim card allows phones to be instantly activated, interchanged, swapped and upgraded, all without carrier intervention.

“The sim itself is tied to the network, rather than the actual phone. Phones that are card-enabled can be used with any GSM carrier,” he said. However, Rwandatel officials said the company intends to retain at least 150,000 of its CDMA subscribers. “With the advent of cellular phones doing double and triple duty as streaming video devices, podcast receivers and e-mail devices, speed is important to those who use the phone for more than making calls.

“CDMA has been traditionally faster than GSM, though both technologies continue to rapidly leapfrog along this path,” said Abdulbaset Elassabi, Rwandatel’s board chairman.

MTN Rwanda, which is partially owned by the Johannesburg-based MTN Group, over a month ago registered its one millionth subscriber.

The company, which is celebrating its 10th anniversary this week, had monopolised the Rwandan telecom market with over 90 per cent of its share.

During the launch of Rwandatel’s GSM, chief executive officer Patrick Kariningufu said the company is set to increase its subscribers from the current 50,000 to about 600,000 by the end of 2009.

“We have introduced a ‘per-second billing’ system and a prepaid offer, which includes spending only 1,000 Rfw ($1.8) for a sim card. Rwandatel has also set the sms price at 20 Rfw for each sms, the lowest price in the country,” said Mr Kariningufu.

The firm also introduced a handset that goes for Rfw 19,000 ($34).

The phone offers videoconferencing, downloading music and video files as well as enabling one to watch TV,” Mr Kariningufu said.

Rwandatel, a formerly state-owned company founded in 1993, had in 2005 been privatised to Terracom Communications, an American IT provider at $20 million or 99 per cent stake.

In 2007, however, the government of Rwanda bought back Rwandatel from Terracom Communications and sold it to LAP Green Networks.