FULL COMPETITION IN THE ISP SECTOR BUT RELATIVELY SMALL MARKET

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There is full competition in the ISP sector with the following ISPs: Artel, Terracom, MTN and ISPA. There are three other current requests for licences including: Business Communications and Value-Added Data (a Mauritian company). All these applicants are also applying for wireless spectrum to deliver their service.

There are around 5-6,000 dial-up subscribers and at the end of 2005 the breakdown was as follows:

Terracom: 2484
Artel: 28
ISPA: 5

The latest Terracom figures indicate that it has around 4,000 dial-up subscribers of which around 180 are permanently connected. The majority are in Kigali. ISPA only started in October 2005 and is targeted at corporates. Terracom’s dial-up rates are RWF15,000 per month plus local call access costs

Terracom has recently launched DSL and has150 subs. The service is currently only available in Kigali but it is concessioning in 6 other areas. There is no planned investment in copper so the total number of subscribers will be limited to fixed line customers. There are 500 subscribers on what Terracom describes as pre-Wi-MAX service. It believes the broadband potential market is around 25,000, particularly as the Government is decentralising its operations.

MTN has launched a GPRS service although its full licence is still waiting for Government approval but this has been done with RURA’s acceptance. It costs RWF20,000 a month flat rate and the service does not fall below 34 kbps. Per Ericsson, CEO of MTN Rwanda says it is about keeping the income of high-value customers:”The point about things like the GPRS upgrade is that it gives us the capacity to keep up with customer demand. For GPRS, we’re targeting our high-end, data customers…Soon we will have EDGE. I want infrastructure with a future.” The company has 4-500 corporate data customers who are easily able to afford the US$265 required for a GPRS-enabled phone. In the first four weeks, it has attracted 800 customers.

It is currently testing broadband wireless using Wi-MAX with Alvarion equipment and will launch the service formally in June 2005. Eriksson acknowledges that it’s been a learning curve:”It’s doing quite well. It’s not only a new service to us but also a new technology, so it’s both a learning curve for our technicians but also in terms of us gauging the product’s potential.” The service has not been priced yet but it will probably start out as a flat-rate with no limitation but later move to capacity used basis”. MTN can also offer data services for corporates between branches.

There are an estimated 150 cyber-cafes in Kigali and another 250 in the rural areas serviced by ARTEL. A hour’s access costs RWF500 per hour (less than $1).

ARTEL was created out a Government decision to connect the rural areas of the country. It is a private company in local hands with its biggest client being the Government. As ARTEL’s Andrew Rugege explained:”Local leaders ask us and the Government for local connectivity and the Government then finances it.”

It puts in a VSAT unit with solar panels where there is no grid power. This is  connected to a 2-line unit capable of offering both voice and data services. These are usually sited in local government offices or schools. Other clients include NGOs and independent entrepreneurs. There are currently 250 VSATs of which 60% are in Government offices. It is currently handling 5 million minutes a month. Its always-on 64 kbps Internet connection costs RWF80,000 a month. Will it do VoIP?”IP voice has to become more stable before we’ll use it as the basis of our network. It has to be done in a way that quality for the client is not degraded.”