MTN Ups Stake in Rwanda

Telecoms

The MTN Group has announced that it has concluded an agreement to purchase a further interest in MTN Rwanda, increasing its shareholding from 40% to 55%.

According to a press statement posted on the company's website last week,it said the South Africa-based company will buy some 15% of 50% stake from a Rwandan company, Tristar Investments SARL which has been the majority shareholder in MTN Rwanda.

Tristar Investments SARL will remain with significant 35% shares after the transaction which will be effected through MTN's wholly-owned subsidiary, MTN International (Mauritius) Limited.

"This acquisition demonstrates MTN's confidence in the Rwandan economy and our resolve to consolidate our position in the region. We are pleased that this transaction has the endorsement of all shareholders," the MTN group President and CEO Phuthuma Nhleko was quoted in a press release as saying.

The director general of Rwanda Utility Regulatory Agency (RURA), a government agency that regulates the telecom sector among others, Mr. Diogène Mugabo said in a phone interview in Kigali on Friday last week that he had not seen an official written statement from MTN. "Any positive investment is welcome. If they want to increase their shares and show the need they can increase," Mugabo said.

MTN was awarded a national GSM licence in Rwanda in April 1998, launching MTN's expansion on the continent. Since then, the company has achieved a mobile phone penetration of 7.2%. For the quarter ended September 2007, the company had registered 576,000 subscribers.

MTN Rwanda has expanded its network coverage across the country by setting up new base stations. In addition, the company, which has operated like a near monopoly for a greater part of the last five years last year built 59 base stations and has plans to expand its network.

Recently MTN Rwanda announced a reduction in all tariffs by more than half. Local and international call tariffs were slashed to 35% and 60% respectively. This will allow the company to grow its subscriber base by 30% this year. MTN Rwanda promised to invest more $30 million in the sector compared to $20million last year.

In 2007, the company launched a seamless roaming services with MTN Uganda, Safaricom Kenya and Vodacom Tanzania. Seamless roaming allows subscribers free roaming between the four networks.

The operation has also rolled out fibre optic backbone infrastructure within Kigali and from Kigali up to the border of Uganda. WiMAX, which has been rolled out in Kigali, is also being implemented in 12 towns across the country.

The MTN Rwanda introduced GPRS roaming and achieved blackberry roaming. The company is also working on the second stage of blackberry services to its customers.

However, the company is currently experiencing a technical hitch with this service, which has downed its network. The officials have informed their customers that a team of experts has been hired to solve the problem and the situation will soon return to normal.

East African Business Week