Rwandatel and the Libyan money trail

Rwandatel, the 80% Libyan owned Rwandan telecommunications company, lost its license to provide mobile and 3G services late yesterday, 4 April. According to the Rwanda regulator (RURA), the decision has nothing to do with the uprising in Libya,

[Regis Gatarayiha, acting director-general of the agency] said the decision to revoke the license wasn’t related to the UN resolution, as the process of evaluating Rwandatel’s performance began on Feb. 4, before an uprising began in Libya. The move was part of an effort by Rwanda to increase the number of mobile-phone users in Rwanda to 60 percent of the population by 2012 from 36 percent now, said Gatarayiha. “If you have three operators with one that is not competing effectively, it’s not helping the penetration rate,” he said. link

The decision follows the freezing of Libyan assets and support for the bombing of Libya from President Kagame.

In the case of Rwandatel, current subscribers to mobile and 3G data services have until Friday, April 8th to make alternative arrangements,

“The mobile services, including GSM voice and 3G Data, will only remain available until Friday, April 8th, 2011. Thereafter the network will be effectively switched off and services discontinued,” [said Regis Gatarayiha, the acting Director General of Rwanda’s Utility and Regulatory Agency (RURA)] link

That doesn’t give Rwandatel users long. However, it does mean a potential boon for the only other in country providers; MTN Rwanda and Tigo Rwanda.

In February, plans were shelved to allow a fourth provider access to market. It’s unclear whether Rwandatel’s woes will resuscitate that interest. Rwandatel fixed line and DSL Internet services remain unaffected by the license revocation.

On a side note, it’s interesting to hear through the Kigali grapevine that U.S. and UK diplomatic staff, USAID, DfID and other NGO staff have been told to stop using Libyan owned services. That means, no more poolside schmoozes at the Laico Hotel opposite the British High Commission.

However, does it mean those NGO’s and diplomatic staff – who may have been using Rwandatel DSL services at home – now have to swtich? Indeed, how many other Libyan owned/invested services are there in Rwanda? Diplomats will be quaking in their boots if it’s discovered those wine and cheese imports are tainted with so much as tuppence from Tripoli.

And how does Rwanda’s support of the Libyan bombing affect Rwandan officials? Are they still free to meet at the Laico? To use Rwandatel services? And are those investments in “mining, agriculture, real estate, tourism and the construction of 400 housing units in Kagarama, Kicukiro District” discussed in January, 2010 all now on hold too?

Update 6 April: From The New Times,

The decision is final

“There is no hope of regaining the license. The decision is final. We have revoked it and this is permanent”. [Rwanda Utilities Regulatory Authority (RURA), Regis Francois Gatarayiha] said, during a news conference at the RURA headquarters. link

MTN Rwanda and Tigo Rwanda stand to benefit,

MTN’s Senior Marketing Executive, Yvonne Makolo, told Business Times in a phone interview that the company is trying to facilitate Rwandatel subscribers to stay connected.

“With this service, we require clients to come with their Rwandatel SIM cards so that we can offer them with new MTN lines. We are also able to transfer contacts from old Rwandatel lines to the new MTN numbers,” Makolo explained.

She, however, declined reveal the number of SIM cards transferred so far, saying it will be announced soon. link

As for the Laico Hotel, it’s now in Rwandan hands,

In a press statement, the Minister of Finance and Economic Planning John Rwangombwa, said that the decision was taken in accordance with UN resolution 1973.

“With respect to Hotel Laico Umubano, all assets related to LAICO directly or indirectly, were frozen, and Laico Management Company discontinued. The Hotel will, therefore, be called Umubano Hotel,” reads the statement in part.SOPROTEL, the company that owns the hotel, will assume management responsibilities in the meantime. link

Update 22 April: Administrators are called in,

The Commercial Court in Nyarugenge, yesterday, appointed Richard Mugisha as Rwandatel’s Administrator, effective immediately, for a period of two months…

…The court added that the administrator would submit a report to court, after a period of two months, recommending whether the company should remain in business or have its assets sold and shut down. link

Photograph of Rwandatel handiwork from the Kigali Wire Flickr account.

One Response to “Rwandatel and the Libyan money trail”

  1. Blue says:

    In the President’s 31st March press conference – available online -he said that Rwandatel had regulatory problems.

    This story also shows how devilishly difficult it is to keep up to date with things in Kigali. Although recently in Kigali for a couple of weeks, I thought this hotel was still “the Novotel”.