Focus Media (Kigali)
10 January 2009
editorial
Last week, a first happened in Rwandan history: police used a water canon to disperse a crowd. Normally, you associate such scenes with political or social protests, yet that was not the case here; those people were angry that they couldn't get in Amahoro stadium to see Jamaican superstar Sean Paul perform, as well as other artists of international stature such as Kofi Olomide.
The concert was the climax of the relaunching of Rwandatel's mobile telephone services, which also included offers for cheap high-quality phones, causing a rush at Rwandatel's sales points.
As of this writing, MTN is celebrating its tenth anniversary in the country which will culminate in a concert by Shaggy, another Jamaican superstar. Police, keep your water canon ready.
In its ten years of presence, MTN certainly changed the telecommunications landscape in Rwanda. In 1998, the state-owned Rwandatel was the only telecommunications provider, serving less than 5% of the population.
Then Rwandacell came in, with the mobile technology that was then only conquering the world. The company spent a lot of time setting up its network, and enticing people with advantageous offers.
Yet the success of its campaign cannot be denied: whereas MTN celebrated its 250,000th subscriber two years ago, it threw a party for its one millionth client in November this year, thus reaching about 10% of the population. This shows a clear strategy: first establish a reliable network, and gradually draw people into it, and then go for the big hunt. For MTN, it has paid off.
It has to be noted, however, that MTN has so far had one big advantage: it worked in a monopoly situation. Indeed, even if the old Rwandatel had its own mobile network, the troubled company never represented any serious competition. It is only now, after Lap Green has taken over the enterprise in its second privatization and taken its time to reorganize it, that Rwandatel is able to concentrate on business.
The relaunch of its mobile network, which has also resulted in lots of "orange" popping up around town-on billboards, caps and T-shirts-clearly shows that this time "yello" Rwandacell will have to deal with a serious contender.
The winner of such competition is, of course, the consumer. We can expect more advantageous offers, maybe even reductions in tariffs-but certainly even better service. Although MTN has never behaved as a monopolist and always stayed focused in its commercial activities, it will not have the luxury of relaxing now that it has one million subscribers. Rwandatel, for its part, will have to work hard to meet, or surpass, the high standards set by its competitor.
And things will even get better, given that the government is negotiating with Millicom International Cellular for a third mobile license.
The advantages of healthy competition have already been shown in the banking sector. Less than ten years ago, although several banks were operating in the country, the sector was a lackluster one. Banks were run in an old-fashioned style, offering only the most basic services such as current and savings accounts. None really seemed interested in getting more customers.
The sale of government shares in banks, and the entrance of modern and commercially-minded bankers in the sector, changed all that. Banks made over their image, it became easier to open accounts, new products and advantageous conditions were offered. Not only did this make bankers smile their way all to their bank, but customers too.
Other sectors are set to follow. A few months ago, the government confirmed that a yet unnamed investor has shown interest to set up a new brewery in the country.
This would, one might hope, inject a healthy dose of competition in a sector where so far Bralirwa has reigned supreme. True, there is some competition to its soft drinks from fruit juice, and to its beers from imported regional brands, but neither prevent that the company works in quasi-monopoly, a position which it sometimes comes close to abusing with its "recommended prices." In a competitive market, the consumer decides what he is willing to pay because he has a choice.
All of this is proof of a healthy economy, and the confidence of foreign investors in a stable economic and political environment which continuously improves when it comes to the ease of doing business.
It is also a sign of a widening consumer base, with people who have more money to spend on "luxury goods" such as soft drinks or a telephone-or who want to put it in a bank account.
Vision 2020 has always been perceived as a very ambitious program, but the sign on the wall today is that it is by no means impossible to achieve.
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