Tigo Launches in Rwanda. Now Available in 7 African countries. What’s next? Libya?
Today, Millicom International Cellular (MIC) launched its wireless service in Rwanda under its so called Tigo brand. Millicom has now become the third telecom carrier in the country. Of note, Millicom has invested close to $89 million to operate in Rwanda. More precisely, the carrier paid $67 million for the third license, and about $52 million to roll out its network in more than 13 districts in Rwanda. Of note, Millicom received its license to operate in Rwanda in November 2008.
Our take: It makes sense for Millicom to have a presence in Rwanda for several reasons: 1. Unlike other African countries like Nigeria or Tanzania, there is still room for competition. For instance, there are 7 wireless carriers in Tanzania Vs 3 in Rwanda. 2. The wireless market in Rwanda is still underpenetrated, with only ~20% of Rwandans using a cell phone on a daily basis. By comparison, close to 50% of Kenyans have a cell phone, Vs 30%+ in Tanzania. 3. By doing so, Millicom continues to play catch up with international carriers like MTN, Orange, and Vodacom. Today, Milliom has presence in 7 African countries: Ghana, Senegal, Congo DRC, Tanzania, Chad, Mauritius, and Rwanda. By comparison, MTN operates in 15 African countries.
Millicom is well positioned to become a successful carrier in Rwanda. It can learn from the best practices from its African sister companies. Tigo intends to offer the best prepaid plan in the market with the most affordable rates to call any time and to any number in Rwanda, according to Millicom’s officials. I believe this is a smart move to attract wireless customers in Rwanda. However, it is likely to further intensify the pricing war in Rwanda, which could further put pressure on the overall ARPU (<$10 per month) in Rwanda.
So what’s next for Millicom? A country like Libya would be a good fit for Millicom as the telecom company still has not presence in North Africa, and Libya is now opening up to foreign investors. But Millicom could face fierce competition from Turkish carrier Turkcell and Middle Eastern carrier Etisalat, which are set to bid for a license to offer fixed and mobile services in Libya.
Other related research:
Libya Moving Full Speed toward the 4G revolution, with Al Madar’s plan to adopt LTE in the coming years.
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