Rwanda signs biggest 2013 deal to boost internet penetration

Having heavily invested in the construction of the fibre optic, the remaining need is to utilize the infrastructure so as to serve the people of Rwanda in ensuring access to the latest model of internet possible and increase its penetration.

In light to achieving the above, the government of Rwanda on Monday June 10 signed a shareholders’ agreement with Korea Technology (KT) which is the leading provider of the 4G LTE networks in Korea.

4G LTE is the brainchild of the KT group and at the moment the best internet technology available according to Mr. Yung Kim the President and Group Chief Strategy Officer.

The shareholding agreement that was signed provides that KT will undertake the required investment which is expected to go over US$140 million while the Government’s equity investment in the Joint Venture will involve assignment of its over 3000km national fibre optic network assets, spectrum and awarding a wholesale-only operator license to KT.

According to Yung, the investment will surpass KT’s own funds to include intervention of banks and inventory credit from manufacturers of the required materials. This will see the project’s investment reach over US$260 million in the course of three year.

“This is the largest investment that we are looking forward to in the year 2013 and we believe it is going to make a valuable transformation on the living standards of Rwandans,” scored Clare Akamanzi the Chief Executive Officer of the Rwanda Development Board who represented the government in the signing.

KT will be the only wholesaler of the 4G LTE while Rwanda’s three telecom companies and other Internet Service Providers will do the retailing job so as to get the network to reach as many Rwandans as possible.

Mr. Yung also noted that despite being an ambitious target, achieving the set goal of 95 percent of Rwandans to have access to broadband internet in the next three years is also still very attainable and with the collaboration from the Government he believes they will not fail.

“Public-Private-Partnership (PPP) with the government of Rwanda to build the 4G LTE network for wholesale is a unique and innovative way to achieve an accelerated nationwide broadband coverage and indeed is an example set aside for other developing countries to learn from. It is the first time such a move has been taken by a country in the world,” KT President Yung offered.

Following closure of the partnership deal and commencement of operations, Rwanda will become the first country in Africa to make such a PPP move o avail broadband to its people and thus a beacon of Africa’s new era of development.

Present to ratify and grace the signing of the contract from the Rwandan government was the Minister of youth and ICT who noted that the benefits of such development in network access are far reaching scoring that it will bring about transformation not only in ICT but also in health, education and boost innovativeness and creativity in entrepreneurship.

“This agreement with KT marks a major milestone in Rwanda’s drive to become a modern knowledge-based and information-driven economy,” Minister Jean Philbert Nsengimana added.

The 25year long agreement that was signed gives Rwanda a 49 percent shareholding while KT keeps a major shareholding of 51 percent. Until the end of the contract a total that is in excess of US$2.1 billion is expected to be invested in the project.

Also in the agreement, Rwanda will become a base for KT’s further expansion on the continent and this will bring about among others training of the country’s own professionals which will take place in Korea and these will be employed in the expansion when the right time comes.

Rapid deployment of high-speed broadband capability in Rwanda will accelerate development of the country’s ICT sector, create jobs including 100 professional jobs that will be available in the Joint Venture itself as wells as help facilitate economic and social progress as reiterated by Yung.

According to the International Telecommunications Union (ITU) reports, 95 percent penetration of broadband will translate into a 10 to 13 percent boost in GDP growth for Rwanda.

According to Yung, rolling out 4G LTE employs the cheapest technology available today and this will translate into a reduction of the market price of internet to Rwandans. The reduction will likely go to up to four to five times lesser than the current market rates.

With this move of the government of Rwanda, telecommunication companies will be required to invest in upgrading their facilities and as reiterated by RDB’s management all Rwanda’s telecoms are aware and are ready to embrace the move.

President Paul Kagame of Rwanda is a Co-Chair on the International Broadband Commission and given the conviction that he portrays in the transformative power that technology especially internet penetration has, there is a great reason for the government’s urge in achieving high level internet penetration as a right for its citizens.