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MTN, Vanu network alliance targets potential 1 million customers

MTN, Vanu network alliance targets potential 1 million customers

The network integration venture between mobile network operator MTN and wireless solutions firm Vanu will target a potential 8% of Rwanda's population or close to 1 million customers.

In January the companies announced the integration of their respective networks which would facilitate the provision of GSM services, including voice and data, to rural areas of the central African country.

In addition to voice and data services, the alliance will enable mobile money services through MTN Mobile Money.

Vanu-Rwanda CEO Anthony Masozera explained that the model, which converges small-scale network architecture, wholesale network operation, and solar power, is based on a revenue share.

"Vanu will build and operate the infrastructure, while MTN will provide the customers. Vanu uses a fraction of the cost incurred by traditional telecoms companies to erect and operate a site which makes the model economically viable in rural areas. e.g. our micro BTS can operate on solar power. Over and above the efficiency aspect is the environmental impact of the model. Usage of solar means we are able to address environmental issues such as pollution associated with the use of diesel powered generators," said Masozera.

He added that the process of integrating the networks could last anywhere between two weeks and a month.

Although there are no costs involved in terms of the alliance itself, Vanu requires a license to operate and must invest in the infrastructure.

At this point the alliance will only benefit MTN subscribers, but because Vanu operates networks on a neutral, wholesale basis, the agreement is non-exclusive and is open to other operators. This means if any agreements are in place with other players, their customers can also take advantage of the service.

MTN and Vanu say the main objective is to address the challenge of establishing and sustaining mobile coverage to rural areas.

"Most rural areas are off the electricity grid, so, using the traditional model, one would have to use a generator to run a site. This can be very expensive in areas where the average revenue per user is very low; so, most rural sites are not profitable and, therefore, not sustainable. Vanu pioneered and owns the rights to a micro base transceiver station (Compact RAN) which typically consumes about 50 watts. This means you can operate a site using only solar power which makes for a more efficient and profitable model. Our wholesale business model also helps lower costs by spreading them across a larger number of customers," Masozera continued.

"We are committed to providing an improved rural service to all our subscribers," said Bart Hofker, MTN Rwanda's CEO. "The agreement with Vanu Rwanda underlines how passionately we feel that someone in a rural area should be able to receive the same level of connectivity as a city-dweller."

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