Regulatory fine takes a toll on Crystal Telecom

Sunday April 8 2018

MTN Rwanda in Kigali. PHOTO | CYRIL NDEGEYA |


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Crystal Telecom has has reported a 272 per cent drop in earnings per share compared with Rwf3.83 gain in 2016 after the 2017 profits were used to pay a regulatory fine to the Rwanda Utilities Regulatory Authority.

A statement released by Rwanda Stock Exchange last week shows the telco earnings per share dropped to negative Rwf6.56 in 2017 from Rwf3.83 in 2016.

The telco which has a 20 per cent state in MTN Rwanda, reported Rwf1.7 billion ($1.9 million) loss last year from Rwf1 billion ($1.1 million) profit the company reported over the same period.

According to MTN Rwanda, the profits were used to pay a fine for non-compliance with the directives prohibiting the inclusion of MTN Rwanda in the MTN South and East Africa (SEA) IT hub based in Uganda.

However, the share price remained stable at Rwf57 on Wednesday and Thursday after earnings results fell short of investors’ expectations.

Bart Hofker, chief executive MTN Rwanda, however, insists the fine did not affected the telecom’s gross revenue, where Crystal Telecom has 20 per cent. The 80 shares are owned MTN Rwanda are owned by MTN Group.


While Mr Hofker did not reveal the revenue the telecom generated in 2017, MTN Rwanda remains the only telco reporting profits.

In January this year, it projected its net revenue generated at the end of this year to grow from Rwf77 billion ($90 million) to Rwf90 billion ($105.3 million).


Rura was the biggest gainer as the fine boosted its revenues in the financial year 2016/17. The regulators annual report of 2016/2017 financial year shows Rura’s revenue grew to Rwf19,3 billion from Rwf9,8 billion recorded in the year 2015/16.

“This tremendous increase is also due to the fines charged on defaulting operators including the Rwf7.03 billion to MTN Rwanda which contributed significantly to the increment in revenues,” reads the report.

MTN Rwanda has remained profitable because of a strong corporate client’s base, while Tigo Rwanda people-centred approach control has helped the telco capture the mass market.

However, Bharti Airtel Ltd acquisition of 100 per cent stake in Tigo Rwanda Ltd could tilt the fortunes of MTN.

Combined, Tigo and Airtel have a combined 57 per cent of the mobile telephony subscriber market, reducing MTN Rwanda’s market dominance.