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Second telecom operator may lose licence

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A Rwandatel shop in Kigali. Photo/MORGAN MBABAZI

A Rwandatel shop in Kigali. Photo/MORGAN MBABAZI 

By BERNA NAMATA

Posted  Monday, February 28   2011 at  00:00

The licence held by Rwandatel, the country’s second telecom operator, is at stake following an enforcement notice issued by the Rwanda Utilities Regulatory Agency over failure to meet its obligations.

Rwandatel is a subsidiary of Green Network, which is part of the Libya Africa Investment Portfolio (LAP), a $5 billion foreign investment.

LAP Green has an 80 per cent stake in Rwandatel while the Social Security Fund of Rwanda has the remaining 20 per cent.

Through a legal enforcement notice signed by Rwanda Utilities Regulatory Agency (Rura) chairman Eugène Kazige, Rwandatel has been notified of its failure to implement its licence requirements, including coverage, rollout obligations, quality of services and investment plan.

The notice, seen by The EastAfrican, underlines Rwandatel’s non-compliance with the agreed investment plan as a telecom operator.

“During their licence acquisition — when we privatised Rwandatel in 2007 through a competitive process — LAP Green came up as the best bidder because of its technical proposal and financial proposal,” said Regis Gatarayiha, the acting director general of Rura.

Lap Green paid the $100m for the financial proposal, but Mr Gatarayiha said it has not fulfilled its technical proposal obligations.

“We found it (technical proposal) very good if implemented. The technical proposal is the annex to the licence that they get, with clear deliverables per year,” he said.

LAP Green was selected from four bidders, including South African giant Vodaphone, as it presented the best offer, including the highest purchase price.

It was the second time the government was privatising the telecom company after Terracom, an American firm that had initially taken over in 2005, failed to meet its licence obligations.

The Libyan company committed itself to invest $87 million in the first year, and another $177 million spread over five years from 2007.

“Now they have been in the market for almost four years yet we see something like 40 per cent of what was supposed to be invested,” said Mr Gatarayiha.

Rwandatel’s commitments also included upgrading the network, but this has not been done for the data and mobile segments.

“When we privatised, they were on CDMA. They had to change to GSM, with a clear rollout plan to cover the whole country. The target by 2010 was 70 per cent coverage in urban areas and 60 per cent in rural areas. Today, they have about 50 per cent for both,” Mr Gatarayiha said.

The regulator has also received a series of complaints from the company’s subscribers regarding the ineffectiveness of the company’s Internet modems and high rate of dropped calls.

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