Rwanda’s Government is Looking for Buyers for Rwandatel

Telecoms

The government of Rwanda is planning to sell 70 percent of its stake in the now state owned phone operator Rwandatel after taking back ownership from Terracom.

"Privatisation Secretariat invites internationally recognised and reputable telecommunications operators or consortia to acquire the bidding documents and submit their bids for the acquisition of a majority stake up to 70 percent in Rwandatel/Terracom SA," a bid document by the Privatisation Secretariat reads.

After months of uncertainty and blame game, cabinet on July 25 decided to buy-back its telecommunications company from controversial youthful American Tech entrepreneur Greg Wyler. The company was bought back for US$12 million.

The Ministry of Finance and Economic planning was authorized to recover all the shares that Terracom executives owned in the company. The name also changed to Rwandatel - making the final seal in changes that are noticeable. For months now, all Terracom offices and Kiosks have been painted pink with 'Rwandatel' inscription from the previous dark red.

The Government accused the American tech businessman and his CEO Christopher Lundh of poor management and failing to deliver on contractual obligations such as rolling out a new mobile network. But this was simply the most visible end of dissatisfactions over lack of investment and insufficient senior management time applied to the company.

However, the most public point of conflict was when Terracom’s management sought to do a share swop with South African-based Rwandan entrepreneur Miko Rwayitare. The latter was one of the founders of the Telecel mobile group (subsequently sold to Orascom) and is currently building himself a new African ICT business. The share swop was subsequently cancelled.

Interested bidders are required to offer both a technical and financial proposal by September 5 this year, according to the bid. The bidders are also required to have a clear commitment and strong financial muscle to implement a realistic plan to boost telecommunications in Rwanda.

In 2003, Greg Wyler bought 99% shares of then Rwandatel, the country's national telecommunications company for US$20 million. Wyler, 37, was also granted a lucrative US$50-million government project to wire up 300 schools - especially primary and secondary - to the Internet via satellite. By June 2007, according to Rwandan officials, only a handful of schools have been wired up. The project was supposed to be completed in 2006.

However, TERRACOM executives say the government did not fulfill its side of the bargain. "We would get to schools that don't even have electricity or computers," said former CEO Lundh. "That is not our fault." In addition, he said that many of the complaints about the company concerned things beyond its ability to control.

Like all disputes of this kind (remember Westel in Ghana), there are always two sides to the argument and frequently the losing private sector party is in no mood to put its case. But there is undoubtedly another side to this story….

(Source: Rwanda News Agency)