25 January 2014

Rwanda: New Govt-KT Venture to Ease Cost of Doing Business

A second joint venture between government and Korea Telecom Corporation will not only reduce the cost of doing trade in the country, but also increase productivity of the economy, the Rwanda Development Board (RDB) has said.

RDB officials wave to KT officials in Korea via video link after the signing ceremony in Kigali yesterday. The New Times/ John Mbanda.

Amb. Valentine Sendanyoye Rugwabiza, the RDB chief executive, made the remarks yesterday after signing a closing memorandum to a new shareholders agreement to establish a second joint venture company; Africa Olleh Services Ltd.

She said the joint venture company will be tasked to accelerate deployment of information technology infrastructure and to develop and operate online services required to support Rwanda's transition to a knowledge-based economy.

"The first company, Olleh Rwanda Network, has already received shareholder funding and is on target to complete 4GLTE wireless broad band roll out as planned. The second company, Africa Olleh Services Ltd, will launch its operations in early March. It's expected to start the delivery of the first of the many government's projects immediately," Rugwabiza said.

She said the second joint venture, expected to reduce transaction costs, marks a significant momentum towards creating business relations between the government of Rwanda and Korean Telecom Corporation.

"The rollout of 4GLT services is essential for government to strategise in building capacities that will drive home the second Economic Development and Poverty Reduction Strategy (EDPRS2) objectives," Amb. Rugwabiza said.

She added: "This has been a requirement that our investors, both local and international have been asking for, we therefore believe that this particular service will play a critical role in promoting the country's investments."

HJ Kim, the president of Global and Enterprise Group Korea Telecom Corporation, said the joint venture seeks to use Africa Olleh Services Ltd as a strategic vehicle to develop a pool of about 700 highly skilled professionals to foster Rwanda's development and facilitate KT's entry into markets in the sub-Saharan Africa.

"Achieving large scale transfer of know-how from KT corporation while developing a broad base of ICT skills is consistent with achieving the goals of Rwanda's economic agenda," he said.

Kim added he expects a win-win situation from the latest partnership.

"The foundation is ready; it's therefore time to work so as to ensure that the right future is sustained," he said.

While Olleh Rwanda Networks Ltd is tasked with adding 4LTE to Rwanda's comprehensive national fibre optic infrastructure and operate the combined infrastructure as a wholesale covering 95 per cent of the population by 2017, the second company will expand the country's "cloud" services capability, enabling business, government and individuals to conduct a full range of economic and social activities online.

The company will also operate as a systems integrator and provider of information technology solutions to the broader market within the region.

The government and KT Corporation first signed a shareholders' agreement in June, last year, to establish a joint venture company to deploy a high-speed broadband network to cover 95 per cent of the population in the next three years.

According to statistics by the International Telecommunications Union, 95 per cent broadband penetration will translate into a 10 to 13 per cent boost in GDP growth for Rwanda.

Today, Rwanda has more than 3,000 kilometres of fibre optic cable, but only about 8.3 per cent of the population currently has access to the Internet.

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