20 September 2017

Rwanda: Tigo Eyes Top Spot By Year's End As It Continues to Make Gains On Market Leaders MTN Rwanda

Rwanda's telecom industry has reached a critical stage in market dominance with the two top players separated by a less than 3-percentage point margin.

According to the Rwanda Utilities Regulatory Authority (RURA) Active Mobile Telephone Subscriptions report for August 2017, MTN controls 42 per cent of the market, Tigo enjoys a market share of over 39 per cent, up from 36.5 per cent in December 2016, while late entrant, Airtel Rwanda, trails with 19 per cent.

MTN is yet to recover from a 15.8 per cent reduction in active mobile users lost in January, which cut its subscribers to 3.4 million from 4.07 million in December 2016. The RURA report, indicates that the country's mobile telephone penetration level is, however, once again on an upward trend following big drops in the first and second quarters of the year.

Presently, the penetration rate stands at 74.4 per cent, an increase of 0.5 per cent from 74 per cent the previous month. This growth is, however, lower than 97.2 per cent penetration level recorded in December 2016 before active subscriber numbers declined by 7.1 per cent in January to 8.28 million from 8.9 million users at the end of 2016. The report indicates that the total number of active mobile telephone subscriptions (90-days revenue generating subscribers) rose from 8.49 million in July to 8.58 million in August, an increase of one per cent. Postpaid user rose to 126,614 in August, from 124,714 the previous month, while prepaid subscribers inched up to 8.45 million people from 8.37 million at the end of July.

Sector analysts attribute the increases registered by telecom firms over the past three months (June to August) to customers promotions, where telecom firms are giving out millions worth of cash prizes while others have rolled out attractive, more affordable and client-centric packages for both data and voice.

These products, the experts say, are all geared at subscriber retention and acquisition. RURA figures of Tigo Rwanda has been the biggest gainers over the past three months, a development that has piled immense pressure on sector pioneers and market leaders MTN Rwanda. The telecom's subscriber figures inched up by 94,852 or 2.9 per cent in July 2017 to over 3.3 million users and rose 1.2 per cent (37,091) in August to 3,395,930 from 3,356,951 in July.

MTN's subscriber base grew by 0.8 per cent (27,628) to 3,574,598 users from 3,546,958 in July, while Airtel Rwanda customers rose by one per cent or by 16,442 new users to 1,609,995, from 1,593,553.

What sector players say

Commenting on the gains, Philip Amoateng, the Tigo Rwanda chief executive officer, said the firm's positive subscriber growth over the reporting is driven by a highly motivated sales and distribution team "that we have on the ground".

"This is also testament to customer confidence in the quality of the services we offer, such as the fast data and Tigo Cash mobile financial services... We are working towards becoming the market leader by the end of 2017," said Amoateng.

However, MTN chief executive Bart Hofker said the firm is focusing on increasing its revenue market share and not just the number of customers, arguing that one can "pump up that figure cosmetically".

"We clean our data base for non-users regularly... Besides, we have been able to grow total revenue in Q2 by over 10 per cent compared to the same period last year. So, the exercise hasn't impacted our revenue," he said in a telephone interview yesterday. Focusing on user numbers does not show a telecom's 'real performance' per se.

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