Rush for data market stiffens competition in telco sector

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Rush for data market stiffens competition in telco sector

With the growing demand for data in the Rwanda’s budding sector, telecoms are yet to up sleeves for yet another tight competition that is likely to lower tariffs on market in favour of subscribers.

The sector that has recorded a positive outlook in terms penetration standing at 78 percent end of first half, witnessed a tight competion in 2012 at the entrance of Airtel Rwanda that slashed call tariffs forcing both MTN Rwanda, market leader and Tigo Rwanda to bow down.

The competition pushed operators to rethink their strategies with most pumping funds in mobile money, but competition leading to scraping of transaction fees by Airtel Rwanda left the segment fragile, with data as an open window.

Rush for data market stiffens competition in telco sector

Moreover, the rush for data comes at the time the telecom sector anticipates an upward growth in the use of smart phones that pick data expected to grow between 60 to 70 percent in the next five years.

“As a telecom we are obviously preparing for the mass migration of our customers from voice to data,” said Shymaa Binbrek, head of strategy and business evolution at Tigo International in an interview with this website earlier last week.

Tigo bowing down to the tight competition in mobile money, opted to increase its investment in data that it announced in the recent transform Africa2015 summit held in Kigali mid-October,2015 thereafter unveiling the 4G mobile internet.

The 4G mobile internet is seen as a catalyst for data market for telcos as it ushers in the fastest internet on mobile phones with ability to facilitate surfing and downloading five times faster than the 3G internet.

The 4G mobile internet move by Tigo adds to the strides Airtel Rwanda had taken when it launched the 4G LTE  internet on their modems  before it provided cost affordable internet packages as low as Rwf100 a day thus  bringing more people in to the data market.

“Our provision of 4G LTE services in Rwanda is a great step forward in widening the scope of possibilities for our customers,” said Tano Oware, the financial director at Airtel Rwanda in a statement.

This means, as experts say operators must tap into the opportunities availed by broad band 4G LTE internet and a countrywide laid fibre optic cable to bolster access to internet so as to leapfrog the economy to technology lead by 2020.

“Telecoms are still fighting on the penny from voice and competing among each other. I think they don’t know what is happening here,” said Michel Bezy, associate director at Carnegie Mellon University in Rwanda.

Bezy says that the data market provides huge opportunities for the telecoms with the growing digital innovations as well as rising demand for data as the country adopts a digital lead economy.

“The way we think about digital is really driven by data,” said Tongai Maramba, general manager in an interview with this website on Monday.

With such opportunities, there is need for telecoms  to partner with local developers to develop  solutions that users can use in their day to day lives thus  bring on more people on the data market.

Nevertheless, the competition has is already forcing  telecoms to look at slashing data tariffs with all the three telecoms now providing cost low data packages for daily, weekly as well as monthly, which experts say will further go down as competition tightens.

“The way we think about digital is really driven by data and our role as telecom is to drive that demand, “Shymaa added.

Despite the growing optimism, there is still a challenge of costly digital devices such as smart phones which is making it harder for more people to possess them, thus lower internet penetration currently at only 25 percent.

“So what we have to do is to work very closely with our partners to bring down the cost of smart phones so that people can access internet,” Shymaa says.

Moreover, the government is working with POSITIVO BGH, a technology company from South America is set to manufacture mobile phones within the country before the end of this year while the batch of 30,000 made in Rwanda laptops has been distributed in schools.

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About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

More posts by | Visit the site of Ndaka

 

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