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Regulatory dust settles for MTN in burgeoning Rwanda

Regulatory dust settles for MTN in burgeoning Rwanda

Rob Shuter, President and CEO of the MTN Group, said over the last twenty years of operation and expansion, the company has landed on the wrong side of regulators in Benin, Nigeria and Rwanda, among others.

Shuter negotiated and facilitated payment of a 7 billion franc fine the company received in May 2017 for hosting IT services outside the country and for "non-compliance with license obligations" according to the Rwanda Utilities and Regulatory Authority (RURA).

Speaking to ITWeb Africa during the 2018 GSMA Mobile 360 Series Africa Conference in Kigali this week, Shuter said despite the difficulties, regulators are "key players in the effort to connect more Africans to the internet" by helping to provide power, handsets, affordability, services and education – which the telco cannot accomplish on its own.

"Many times we need regulatory support, we need a vision and we need to invest behind it," said Shuter.

Jean-Francois Le Bihan, Policy Director for Sub Saharan Africa at the GSMA said the fine imposed on MTN, as well similar actions by regulators in other parts of Africa, shows the need to rethink regulatory approaches to cross-border infrastructure and services, and data flow.

"Rwanda has the ambition to be an ICT hub and develop some of its infrastructure as well as to host some of the applications and data from other East African countries. For this aspiration or ambition to be realised, they need to allow data to flow in but also for data to flow out. I think this is a bit of tit-for-tat for partner states (in regional blocs) and it is very important."

Mobile connectivity stats

According to the 2018 GSMA Mobile Connectivity Index (MCI), released during the Conference, when it comes to the availability of infrastructure that can increase the adoption of mobile internet, Rwanda is in fourth place behind South Africa, Lesotho and Mauritius.

The country's mobile internet penetration is now at 22%, up from 13% in 2014.

Shuter believes the challenge to connect more people in the country and in other markets across its footprint is being underestimated.

"If I look at MTN customers across our geographies and we first look at data users, we realise that of about 240 million customers, only 120 million people were connected to the internet. Then we asked how much data do they use, what kind of device do they own and what kind of services can they enjoy. When we looked at those (subscribers) using more than 1 megabyte per week, a smartphone or basic 2G phone, that 120 million ends up becoming 70 million. As we sit here today, it is really only between one-out-of-five or one-out-of-four who are enjoying the benefit of a connected world."

He said that the statistic that Sub-Saharan Africa holds a 10% share of the number of people who are connected to the internet globally, with half of those being data users, is misleading.

As an example, of the four million MTN customers in Rwanda, only three million are connected to the internet said Shuter. "But when this is narrowed down to those using more than a megabyte or more on a weekly basis by way of a smartphone, then the figure drops to only 800 000 customers."

Rwanda's results

Shuter is scheduled to present MTN's interim financial results in August and confirmed Rwanda continues to produce good results, despite the low number of internet users.

"The Rwandan opco has done very well and I think we also learned a lot in terms of deploying MTN networks. We learnt a lot when we moved here (in 1998) and when we moved to the other countries. Now we have some very large economies in the group like South Africa, Nigeria and Iran. Ghana is also significant and while Rwanda is not a large contributor to the earnings of the Group, I think it has been a large contributor to how we have grown the group over the years."

According to RURA's latest mobile telephone subscription statistics, in May 2018, MTN Rwanda has the most subscribers (postpaid and prepaid) with 4, 089, 560, followed by Tigo Rwanda with 3, 382, 047 and Airtel Rwanda with 1, 604 134.

Telco market share at the end of May 2018, based on the operators' returns, shows that MTN Rwanda is in the lead with 45%, followed by Tigo Rwanda with 37% and Airtel Rwanda with 18%.

RURA approved Airtel Rwanda's acquisition of Tigo Rwanda in January 2018.

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