Rwanda Telecommunications Sector Performance Review 2007

2007 Rwanda 

Telecommunications 

Sector Performance Review 

a supply side analysis of policy outcomes 

ALBERT NSENGIYUMVA 

ANNET B BAINGANA

2007 Rwanda 

Telecommunications Sector Performance Review 

a supply side analysis of policy outcomes 

Albert Nsengiyumva* & Annet B Baingana 

Rwanda Education and Research Network 

Hosted at 

Kigali Institute of Science and Technology 

P.O. Box 3900 Kigali 

*assisted by Innocent Bulindi and James Karamuzi

Rwanda 

SERIES EDITOR: 

Alison Gillwald 

Other country studies in this series are available on 

www.researchICTafrica.com. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benin: Augustin Chabossou 

Botswana: Sebusang Sebusang, MP Makepe and TD Botlhole 

Burkina Faso: Pam Zahonogo 

Cameroon: Olivier Nana Nzèpa and Robertine Tankeu 

Côte d'Ivoire: Arsene Kouadio 

Ethiopia: Lishan Adam 

Ghana: Godfred Frempong 

Kenya: Tim Waema 

Mozambique: Americo Muchanga and Francisco Mabila 

Namibia: Christoph Stork and Mariama Deen-Swarray 

Nigeria: Ike Mowete 

South Africa: Steve Esselaar and Alison Gillwald 

Tanzania: Ray Mfungayma and Haji Semboja 

Uganda: FF Tusubira, Irene Kaggwa-Sewankambo, Apolo 

Kyeyune, Ali Ndiwalana, Annrita Ssemboga 

Zambia: Sikaaba Malavu 

Proof reading: Beki Nkala 

This research is made possible by the support of the Independent Development Research 

Centre, (IDRC), Ottawa, Canada. 

Senior Programme Manager: 

Heloise Emdon, hemdon@idrc.c 

South Africa 

For further information contact the RIA! coordinator Beki Nkala on 

nkala.b@pdm.wits.ac.za or go to www.researchICTafrica.net 

2 2007 Telecommunications Sector Performance Review


RESEARCH ICT AFRICA! 

(www.researchICTafrica.net) 

Research ICT Africa! (RIA!) fills a strategic gap gap in the development 

of a sustainable information society and network economy by building the ICT policy and regulatory 

research capacity needed to inform effective ICT governance in Africa. 

The establishment of the Research ICT Africa! network emanates from the growing demand for data and 

analysis necessary for appropriate but visionary policy required to catapult the continent into the information 

age. Through network development RIA! has started to build an African knowledge base in support 

of ICT policy and regulatory design processes, and to monitoring and review policy and regulatory 

developments on the continent. 

The research, arising from a public interest agenda, is made available in the public domain and individuals 

and entities from the public and private sector and civil society are encouraged to use it for teaching, 

further research or to enable them to participate more effectively in national, regional and global ICT 

policy formulation and governance. 

RIA! seeks to extend its activities through national, regional, continental and global partnerships. It is 

part of the research and training collaborative LIRNE (www.lirne.net) and peers with other networks in 

the South, specifically LIRNEasia (www.lirneasia.net) and DIRSI (www.dirsi.net) in Latin America. 

The network currently consists of nodal members from 17 African institutions: 

Benin – CEFRED, Université d'Abomey Calavi 

Botswana – University of Botswana 

Burkina Faso – CEDRES, University of Ouagadougou 

Cameroon – University of Yaounde II 

Côte d'Ivoire – CIRES, l'Université Nationale de Côte d'Ivoire 

Ethiopia – University of Addis Ababa 

Ghana – STEPRI of CSIR 

Kenya – University of Nairobi 

Mozambique – Universidade Eduardo Mondlane 

Namibia – Namibia Economic and Policy Research Unit 

Nigeria – University of Lagos 

Rwanda – KIST (Kigali Institute of Science, Technology and Management 

Senegal – CRES 

South Africa – LINK Centre, University of Witwatersrand 

Tanzania – Tanzania Communications Regulatory Authority 

Uganda – University of Makerere 

Zambia – University of Zambia 

East Africa Regional Manager: Dr Lishan Adam 

West Africa Regional Manager: Dr Olivier Nana Nzépa 

2007 Telecommunications Sector Performance Review 

3




TABLE OF CONTENTS 

Executive Summary 7 

Background 8 

Policy and Regulatory Environment 10 

Regional and International Policy and ICT Initiatives 12 

Market Structure 14 

Investment and Market Share 16 

Telecommunications Regulatory Environment 24 

Implementation of ICT Policies and Projects: 29 

Current Status and Ways Forward 

Assessment of National Infrastructure 35 

Development Projects 

Conclusion and Recommendations 38 

Annexe 1 40 

References 41 


5





Executive Summary 

The following report presents the status of ICT development in Rwanda 

as an outcome of the national policy regulatory environment and measured 

in terms of indicators for access and penetration resulting from policy 

and regulatory measures. The report is part of a wider continental 

study undertaken by Research ICT Africa! Network and should be read 

in conjunction with the comparative analysis of the country reports 

available at http://www.researchICTafrica.net. 

Rwanda is amongst the few African countries that embarked on developing 

an integrated ICT Policy in the late 1990s with a clear vision of making 

ICT an integral part of its global socio-economic development plan, 

with the hope that the country would move from an agricultural-based 

economy into a knowledge-based economy through the development of 

competitive service-based industries. 

The country has gone through major economic reforms, including 

telecommunications reforms, that aimed at increasing the competitiveness 

of the telecommunications industry and attracting foreign investment. 

Amongst those reforms was the establishment of an independent 

regulatory body known as the Rwanda Utility Regulatory Agency 

(RURA). The main mission of RURA is to promote fair competition, 

improve quality of services, create an enabling environment to attract 

investors with the intention of improving the provision of services to citizens 

in accordance with the Universal Access obligations set by the 

International Telecommunication Union. 

Despite a high level of political commitment to take ICT development forward 

as a priority, the current trend in the sector’s development reveals 

several gaps that need to be addressed if the country expects major 

returns within the coming 20 years. Those gaps are related to issues of 

access to and affordability of ICT services in addition to weak institutional 

capacity, as well as institutional structural challenges. Meanwhile, 

in order to address those gaps, a number of programmes and projects 

are underway within the National Information and Communication 

Infrastructure Plan (NICI II Plan) framework. These focus on increasing 

network access around and outside the country over satellite and fibre 

technologies, increasing the efficiency of government service provision 

through a variety of programmes, and establishing applications in support 

of good governance and poverty alleviation, with special attention 


7


to the development and transformation of the rural communities through 

the adoption and usage of ICT. 

The report is structured as follows: It starts with a general overview 

of Rwanda and its macro economic environment. It breaks the environment 

down to explain the social, economic and political context of 

the Telecommunications sector in the country. This is followed by an 

examination of the regulatory environment through the use of a perceptions 

survey methodology referred to as the Telecommunication 

and Regulatory Environment (TRE). Some current initiatives to 

improve access to ICTs are reviewed before the conclusions and recommendations 

are presented. 

Background 

Rwanda envisages its economy becoming middle income by the year 

2020 through transformation of the economy from predominantly agricultural 

to one that is information rich and knowledge based. The Government 

has decided to use ICT as a tool to reach this developmental 

goal. The vision document has been made operational through the 

national policy document widely known as the National Information 

Communication Infrastructure Plan (NICI 1 (2001-2005)). Rwanda is currently 

implementing NICI II (2006-2010). 

Although African policymakers have broadly accepted the developmental 

potential of ICT, there has been hardly any data or analyses on which 

to base informed decisions. The research that has been undertaken and 

used in order to understand policies and ICT programmes has been 

based on what has worked in developed countries, where the context is 

very different from reality in the developing world. 

This research seeks to review performance in order to measure the 

impact of policy and regulatory strategies against national ICT objectives 

for Rwanda. In general, this paper explains the relationship 

between policy and regulation frameworks and the development of information 

society in Rwanda. 

STUDY METHODS AND OUTCOMES 

The methods used to achieve the objectives of this study are straightforward. 

The researchers used desk research to obtain background socioeconomic 

information on Rwanda, and then proceeded to review previous 

studies of ICT in Rwanda in order to obtain reliable baseline data. 

They contacted major stakeholders in ICT in the public and private sectors 

and set up times for semi-structured interviews. Interactions with 

major telecommunication operators, the Regulator, as well as the Ministry 

of Finance and Economic Planning, allowed the researchers to 

gather the various data needed in this report. Lastly, there were data and 

analyses that inspired the researchers, including reports from David 



Butcher from New Zealand and the World Bank reports on ICT development 

in Rwanda. 

COUNTRY BACKGROUND 

Rwanda is a small, landlocked country, situated south of the Equator, at 

a latitude between 1.04º and 2.51º south and at 30.53º longitude east. It 

is located in the Great Lakes region in East Africa. According to the general 

population and housing census of Rwanda (2002), the total population 

is 8 128 553. Rwanda is still one of the most densely populated countries 

in Africa with an extremely high growth rate of about 3%. The per 

capita GDP of Rwanda is US$230 with 60% of the population living below 

the poverty line. Rwanda’s economy is largely agricultural, accounting 

for about 46% of GDP whereas the input of industry and services are 20% 

and 34% respectively. The main export products are tea and coffee. 

According to the Ministry of Finance’s statistics, GDP growth has recovered 

from 0.9% in 2003 to 4% in 2004 despite significant energy shortages. 

The recovery has mainly been driven by growth in the construction, 

transport and information and communications sectors. Rwanda has 

greatly benefited from Highly Indebted Poor Countries (HIPC) debt relief 

which has led to a reduction in the debt-to-export ratio to 150% by the 

end of 2003. Additional debt relief will be forthcoming under the Multilateral 

Debt Relief Initiative (MDRI). Relief from both the World Bank and 

IMF under the MDRI has resulted in a further reduction of Rwanda’s 

debt-to-export ratio to 58.5% by the end of 2005. However, given its low 

export base, the country remains heavily burdened by debt and will definitely 

require grant financing for a period of time. 1 

Rwanda faces an enormous challenge from the lack of skilled manpower 

and lack of reliable electrical and water supplies which have adversely 

impacted the health and education sectors. This makes it difficult to 

serve the most vulnerable poor people. The illiteracy rate is estimated 

to be about 50% among adults living in rural areas. 83% of the population 

lives in rural Rwanda. The emerging private sector is rapidly growing, 

particularly in the fields of construction, telecommunications infrastructure, 

and ICT. Rehabilitation of the banking sector, the easing of 

restrictions on trade, the establishment of a streamlined accounting 

system, strengthening of the independence of the central bank and 

increasing privatisation, all coupled together mean hope for Rwanda’s 

current challenges. 2 

1 [Online]. Available. www.minecofin.gov.rw . 

2 [Online]. Available. www.statistics.gov.rw . 


9


Policy and Regulatory 

Environment 

As in many other sectors, the time line for ICT sector development in 

Rwanda in general and telecommunications in particular can be divided 

into two major periods: the periods before and after 1994. The first 

period is characterised by a centralised and government-based telecommunication 

sector, where the Ministry of Telecommunication played both 

the role of service provider as well as the regulator until 1993 when a government-based 

company known as Rwandatel was established with a 

semi autonomous status. 

After the civil war and genocide in 1994, the main challenges in telecommunications 

development were to rehabilitate the telecommunications 

infrastructure damaged during the 1994 war and rebuild the government-owned 

company from scratch, as many of its employees had been 

either killed or exiled. Rwandatel was the only telecom player on the 

ground until 1998 when MTN Rwandacell entered the market with Rwandatel 

as one of the main shareholders as well as the host of the main 

switches and related equipment. (See Annexe 1 for the milestones that 

occurred during the period from 1994 to date as well as some projections 

for 2007 based on interviews made with policymakers as well as the managers 

of major telecom companies.) 

POLICY FRAMEWORK 

The ICT sector is seen in Rwanda as an engine to support economic 

growth. The government of Rwanda has embarked on a series of policy 

and regulatory changes in the ICT sector in the hope that the country will 

take the lead in transforming its traditional trends from an agriculturebased 

economy to a service-based economy within the next 20 years. 

The ICT-2020 policy sets out the elements of the government’s ICT policy 

and strategies within the context of the Government’s broad socio-economic 

development objectives in the 20-year time frame in Vision 2020. 

In formulating its ICT 2020 policy the government is guided by the principle 

that, if Rwanda is to take full advantage of the opportunities of the 

information age and develop a vibrant multi-sector information and 

knowledge economy, it should not be just a consumer of ICT goods and 

services but also a producer and developer of the technology. 

The Government will implement this ICT Policy over a period of 20 years 

(up to 2020) through the implementation of five-year NICI Plans in four 

phases. The first, second and third NICI Plans will emphasise the 

exploitation and utilisation of ICT products and services to support the 

delivery of government services and the activities of various sectors of 

the economy. The fourth NICI Plan puts emphasis on the production, 

development and delivery of ICT products and services. Each of the NICI 

Plans will therefore have elements of ICT utilisation and exploitation as 

well ICT production and development. The first, second and third NICI 



Plans focus on programmes, projects and initiatives that promote the 

utilisation and exploitation of ICT in the society and economy while the 

fourth NICI Plan changes the emphasis to programmes, projects and initiatives 

targeted at accelerating the development of the ICT production 

sector’s production of ICT goods and services for the domestic and the 

export market. 

The adoption of socio-economic development policy in respect of the ICT 

2020 policy framework will facilitate the realisation of the Vision for 

Rwanda by developing Rwanda’s information society and economy. The 

Government is therefore fully committed to implementation of this integrated 

socio-economic development and ICT policy within the context of 

the Vision for Rwanda. By the year 2020 Rwanda’s predominantly agricultural 

economy will be transformed into: 3 

A middle-income economy dominated by the trading in ICT products 

and services; 

An economy characterised by a large commercial service sector with 

a reasonably large and vibrant ICT service sub-sector and industry; 

An economy in which the majority of the working population is either 

directly or indirectly involved in information and communications 

related activities; 

An economy in which a reasonably large proportion of the population 

has access to information and communications technology products 

and services. 

NATIONAL INFORMATION AND 

COMMUNICATION INFRASTRUCTURE PLAN II 

(NICI PLAN II) 

The Second NICI plan is based on the Vision for Rwanda (VfR) with three 

components: 

(1) Improving the standard of living of Rwanda by enriching social, economic 

and cultural well-being through the modernisation of the 

economy and society; 

(2 Developing Rwanda into a middle-income country by Year 2020; 

and 

(3) Modernising the Rwandan economy and society by using ICT as an 

engine for accelerated development, economic growth, national 

prosperity and global competitiveness. 

Eight strategies are articulated to implement the mission and sub-missions 

of the policy: 

Transform Rwanda into an IT literate nation; 

Encourage the deployment and utilisation of ICT within the economy 

and society; 

Improve the efficiency of the Civil and Public Service; 

Improve the information and communications infrastructure of 

Rwanda; 

3 http://www.rita.gov.rw/laws/ict_policy.html 


11


 

 

 

 

Transform education using ICT to improve accessibility, quality and 

relevance; 

Improve human resource capacity to meet changing needs of the 

Rwanda economy; 

Develop the laws, institutions and regulations to support wide use of 

ICT; 

Facilitate national reconciliation and reintegration through ICT 

interaction. 

The expected quantifiable results from these strategies are: 

A progressive reduction in the contribution of agriculture to the economy 

from the current 75% to about 50% by 2015 and 40% by 2020; and 

At the same time an increased contribution from the services and 

industrial sectors. (The ICT sub-sector was estimated in 2000 at 

about 10% of the economic contribution of the industrial sector). 

In summary, the goal is to make Rwanda a Predominantly Information 

and Knowledge Economy (PIKE), thereby reducing the role of the agriculture 

sector as a major contributor to the economy. 

Regional and International Policy 

and ICT Initiatives 

Following a long struggle starting in 1996, Rwanda has finally been 

admitted to the EAC this year (2006). Kenya and Uganda are key trading 

partners for Rwanda and it therefore makes sense to formalise these ties 

through EAC membership. Rwanda is also a member of the Common 

Market for Eastern and Southern Africa (COMESA). It benefits from 

membership in the Association of Regulators for Information and Communication 

in Eastern and Southern Africa (ARICEA) and from the 

COMESA ICT policy that was developed to serve as a policy model for the 

harmonious development and application of ICT within member states 

with the view of turning COMESA itself into an information society. The 

policy framework focuses on providing affordable, ubiquitous and highquality 

services, building a competitive regional ICT sector, and creating 

an enabling environment for sustainable ICT diffusion and development 

(Butcher 2006). However, the regional framework does not provide 

guidelines and approaches for broadcasting, Internet and postal services, 

nor applications such as e-commerce, e-education, e-government, 

e-agriculture and e-health. 

In order to achieve the above objectives, member states including 

Rwanda are encouraged to adopt new approaches that can enable interconnectivity 

between all operators and service providers within the 

region, promote universal service/access, encourage competition in the 

sector through the removal of barriers to entry, and establish an appropriate 

licensing regime that is transparent and conducive to investment 



in the sector. However, these official efforts towards developing harmonised 

policies and integrated markets have been pre-empted by commercial 

initiatives to remove roaming charges in the East African region 

and treat all calls in the region as local calls. 

As part of its admission to the EAC, Rwanda will be required to negotiate 

with members on key areas such as market access and hence ICT 

policy. One of the major ICT initiatives that is supported under EAC is the 

East African Submarine Cable System EASSy project which will be discussed 

in detail below. 

LEGAL FRAMEWORK 

The current Telecommunications Law in Rwanda was passed by the 

Transitional National Assembly in 2001. This Law is comparable to laws 

in many other countries passed at, or close to, that time. It grants the 

Republic the authority to regulate Telecommunications and sets up a 

regulatory board to carry out that function. It requires all operators of 

telecommunications services to be licensed and creates individual 

licences and standard licences. Significantly, it allows the Regulatory 

Board to make alterations and additions to licences and notes that some 

services do not need licences. The Law requires operators to provide any 

natural person with connection to a public telephone service and sets a 

deadline within which connections must be provided. 

INSTITUTIONAL ARRANGEMENTS 

The key institutions in the Telecommunications Sector in Rwanda are: 

MININFRA: 

This is the government ministry in charge of telecommunications and is 

known as the Ministry of Infrastructure. Its main priority in 2006 has 

been to review the Telecommunications Law of 2001. 

RWANDA UTILITY REGULATORY AGENCY (RURA): 

The agency began operations in January 2003. Its main objective is to 

regulate operators that supply telecommunication networks and/or services. 

RURA is a multi-sector regulator also responsible for the regulation 

of energy, transport, communications, water and waste management 

utilities.RURA’s activities in ICT have been associated with issuing radio 

communications and telecommunications licences and tariffs as well as 

analysing interconnection compensation between MTN Rwandacell and 

Rwandatel. This board acted as mediator to help the two operators find 

an intermediate solution to that problem. In addition, the board decided 

that each operator shall contribute 2% of its turnover towards the Universal 

Access fund (UAF). 

RURA has an alarming shortage of human capacity to be able to fulfill 

its mandate. It is worth mentioning that for the last 12 months RURA has 

had only one person working on telecommunications issues. It needs 

more skilled personnel from all fields of expertise to staff this division. 


13


RWANDA INFORMATION TECHNOLOGY AUTHORITY (RITA): 

RITA was established to serve as a national coordinator to support the 

development and the implementation of the NICI Plans. It has responsibility 

for coordinating any other ICT initiatives and projects that aim at 

achieving the main objective of transforming Rwanda into an information 

rich society. 

These key institutions demonstrate that Rwanda is determined to succeed 

through its firm decision to use ICT as a tool to achieve its developmental 

goals. The open competitive telecommunications market 

being developed, the emphasis on taking a proactive approach to developing 

trade relationships, the effective participation in regional and 

multilateral organisations and the ICT strategic plan leave no doubt 

that there is a very bright future and a hope that the underlying core 

goals will be achieved. 

Market Structure 

Telecommunication services in Rwanda have been provided by one fixed 

and one mobile company. However, the Rwandan Government through 

RURA has now issued a mobile licence to Rwandatel and a fixed licence 

to MTN Rwandacell. The following section presents the current services 

offered by each telecommunication company in Rwanda. 

Sub Heading RWANDATEL: This company has been the governmentowned 

incumbent fixed-line operator since 1993. Currently the company 

belongs to Terracom, an American-based company that was created in 

2004 as an Internet service provider in Rwanda. Terracom’s core business 

has been to lay fibre optics across the country and install wireless 

Internet in many schools and communities. The company is rolling out a 

nationwide CDMA network that will allow provision of both Internet and 

mobile services. 

Sub Heading MTN RWANDACELL: Initially a mobile operator, Rwandacell 

mainly deals with supplying mobile services and is now offering 

Internet services via its cellphone network (GPRS). The operator is 

ready to begin the roll-out of wireless broadband data services through 

WiMax. With its new fixed-line licence the company has started offering 

fixed-line services as well. 

Sub Heading ARTEL COMMUNICATIONS: This operator has mainly 

been involved over the last four years with rural telephony through its 

satellite communications network. The company is now shifting to Internet 

service provision targeting big consumers. The company, through 

government funding, is planning to acquire around 100 MBps capacity 

over satellite from Intersat this year and will be selling bandwidth to 

other ISPs and government institutions at a very competitive price 

according to the Minister of Communications and Energy (New Times, 

15 January 2007). 



TABLE 1: SUMMARY OF THE STATUS QUO OF THE TELECOMMUNICATIONS 

SECTOR AS AT 2006 

Telecommunication 

services 

Fixed lines 

Mobile Services 

Internet Service 

Providers (ISPs) 

Cyber Cafés and 

Community Centres 

Call Centre Services 

VSAT 

VoIP 

Policy 

Rwandatel/Terracom has been the major telecom operator in 

Rwanda providing voice telephony and Internet services. MTN 

Rwandacell has also been licensed to offer the fixed-line services. 

Artel was a “universal access” based company providing fixedline 

telephones and the Internet over satellite mainly in remote 

areas. The government is investing in Artel to make it a whole 

sale Internet company servicing government institutions as well 

as other ISPs by offering bandwidth at low price. 

MTN Rwandacell is the main private cellphone company 

established in 1998. In October 2005, a new mobile licence was 

awarded to Rwandatel when it was privatised. 

Rwandatel/Terracom is the major Internet Provider. Three other 

players are in business: MTN Rwandacell; Artel, (licensed to 

provide voice and Internet in underserved areas); ISPA, a small 

ISP launched in 2005 with the main focus on wireless connectiv 

ity for corporate customers. Two academic institutions (Kigali 

Institute of Science and Technology and the National University 

of Rwanda) have also been issued free licences to provide Inter 

net services over VSAT for academic and research purposes. 

500 Cyber cafés are estimated to be operational throughout the 

country with 75% located in the capital, Kigali. There is no 

licence required to operate a cyber café. Community Information 

Centres (CIC) are being deployed in remote areas and are 

heavily supported by both the government and international 

organisations. 

MTN Rwandacell and Electrogaz, the power company, have call 

centres for their own customers. In addition, Business Commu 

nication Service (BCS) has a call centre business which is used 

to service Tuvugane and its own taxi business as internal 

clients. It is looking for other companies locally to develop a 

larger customer portfolio for the call centre. 

20 Broadband VSATs are operational in Rwanda. The major 

owners are international organisations, ISPs and higher educa 

tional institutions. The licence fee is US$5 525 per year plus 15% 

of the monthly satellite segment fee. Around 400 narrowband 

VSATs have been deployed by Artel Communication Company in 

the countryside. 

VoIP is not legal. The current licences allow MTN and Terracom 

to use and offer VoIP services, as their licences are all-encom 

passing.. However the legalisation of VoIP by the regulator is 

still at the preliminary ideas stage. 


15


Investment and Market Share 

This section studies the market share and market investments in the ICT 

sector in Rwanda. Furthermore, it discusses access to ICT services and 

the cost of ICT usage in the country. The table below provides an 

overview of telecommunications investment growth and generated revenues 

as well as direct job creation. The data was collected from MTN 

through annual reports and from Rwandatel through interviews. The 

interviews cannot be fully validated since significant changes were 

occurring within Rwandatel at the time they were conducted (the company 

was being integrated into Terracom). When the mobile data is considered 

alone, the level of investment has been significant, especially in 

the expansion of the mobile network backbone around the country as 

well as the reinforcement of the base stations in the main cities like 

Kigali. On the other hand, the company is making a significant return on 

investment despite power shortage issues that have negatively affected 

the telecommunication infrastructure around the country. 

The main issue for operators today is linked to the low level of penetration, 

especially in the semi-urban and rural areas. Current mobile penetration 

rate is around 3%, far behind the average rate in the region (eg 

Uganda, Kenya). The city of Kigali records 60% of mobile subscribers; 

however, it only covers around 10% of the population. “Tuvugane” public 

phones were used as a strategy to open up access to remote areas 

using mobile technology but 90% of Tuvugane dealers operate in the 

major cities or semi urban areas. 4 

TABLE 2: SOCIO-ECONOMIC PERFORMANCE OF THE TELECOMMUNICATIONS 

SECTOR IN RWANDA 

Socio Economic Indicators 2003 2004 2005 2006 

Total Investment 3 723 085 000 2 306 143 000 5 665 153 000 5 026 461 000 

(RW Francs) (US$6.8 million) 5 (US$4.2 million) (US$10.3 million) (US$9.1 million) 

Annual revenue 15 663 469 000 20 056 201 000 18 812 518 000 33 144 313 000 

(RW Francs) (US$28.5 million) (US$36.5 million) (US$34.2 million) (US$60.2 million) 

Taxes 3 735 804 213 6 512 211 986 6 607 008 574 9 121 399 468 

(RW Francs) (US$6.8 million) (US$11.8 million) (US$12 million) (US$16.6 million) 

Direct job creation 428 481 545 352 

(over head count) 

Indirect job creation N/A? N/A N/A 5 820 

Universal Access Fund N/A 171 774 695 166 202 866 295 344 085 

(RW Francs) (US$0.3 million) (US$0.3 million) (US$0.5 million) 

Source: RURA 

N/A? means “Not Available” 

4 This was from an interview with the Distribution Manager MTN Rwanda. 

5 Approximate values only, based on 1US$=550RWF 



ACCESS TO ICTS 

The availability of services involves aspects of both access and affordability. 

MOBILE AND FIXED 

The main telecommunications services currently available in Rwanda 

are limited to mobile, fixed and the Internet. While the fixed services 

have declined over the past 10 years, mobile service has grown rapidly 

from its launch in 1998 with an annual subscriber growth rate between 

40% and 60% from 2003 to 2006. Meanwhile the mobile teledensity is still 

very low at 3%, one of the lowest in the region. 

The issuance of a second mobile licence in 2005 was expected to increase 

the rate of mobile subscribers by bringing competition between the two 

mobile operators, MTN and Terracom-Rwandatel. Despite its very competitive 

price (relative to MTN, but still high by continental standards), 

Terracom-Rwandatel mobile services have not yet taken off. Only a few 

thousand subscribers have been recorded since May 2006 when the company 

launched its new mobile services over CDMA technology. 

TABLE 3: INCREASE IN THE NUMBER OF MOBILE AND FIXED SUBSCRIBERS 

Company Service 2001 2002 2003 2004 2005 2006 

Rwandatel Fixed Lines 21 458 25 105 25 565 22 972 23 903 21 197 

Public Telephones 3 933 

MTN Rwandacell Mobile Lines 44 117 82 391 97 261 137 271 219 657 303 612 

Public Mobile phones 1 457 3 500 5 000 

ARTEL 0 60 304 452 490 490 

TOTAL 65 575 107 556 123 130 166 085 244 050 330 299 

Source: RURA Annual Reports 2004, 2006 

Teledensity is estimated at 2.09 per 100 people 

For the fixed network: 0.3 per 100 

For the mobile network: 2.9 per100 


17


INTERNET AND DATA MARKET 

The Internet is likely to be the major emerging service over the coming 

five years. Infrastructure development is increasing around and across 

the country with MTN Rwanda and MTN Uganda to connect over fibre, 

and the EASSY project. More Internet service providers are likely to 

enter the market and offer a variety of services and applications in support 

of the implementation of the NICI Plan II. 

The demand for data services as a whole and the Internet in particular 

has grown over the past few years and is expected to be even bigger over 

the coming years. This is due to the fact that the implementation of NICI 

Plan II is focused on e-government applications as well as network infrastructure 

development. The major operators, MTN and Terracom-Rwandatel, 

are involved in developing national infrastructure backbone using 

fibre optic, WiMax and CDMA technologies. In terms of subscriber 

growth, the number of individual subscribers has not yet taken off 

despite the numerous technological options available as alternatives to 

traditional dial-up subscriptions over copper, which is limited due to the 

shortage of fixed land-lines. 

Interesting to note is the fact that in the absence of cheaper fixed broadband 

technologies and services the demand from individual users has 

moved to wireless for those who can afford to acquire laptops. Two main 

technologies are currently available: EVDO over CDMA provided by Terracom-Rwandatel 

and GPRS provided by MTN. The total number of wireless 

subscribers for both providers is estimated to be 3 200 with the 

majority of subscribers on EVDO due to its high capacity bandwidth compared 

with GPRS, even though the monthly fee of US$70 a month is high. 

The major increase in Internet use comes from public access such as 

Cybercafés and telecenters. Cybercafés have been very successful in the 

major cities and semi-urban areas. The total number of Cybercafés is 

estimated to be 500 with a great number in Kigali, the capital of Rwanda. 

The lower average access rate is 10 clients per day (semi- rural areas) 

while the highest average access rate is 90 clients per day. 

National network coverage for data traffic has grown rapidly over the 

last two years with the establishment of Terracom as a new Internet 

service provider in 2004. The company has made tremendous efforts in 

terms of building high-capacity network infrastructure around the capital 

city Kigali, as well as from Kigali to Butare, where the National University 

of Rwanda (NUR) is located approximately 130km from Kigali. 

After the acquisition of Rwandatel through privatisation, Terracom has 

built a CDMA network on top of existing Rwandatel network facilities 

around the country and now offers Internet and mobile services over 

CDMA technology mainly in Kigali city and major urban areas. 

After the issuance of a new licence to provide data services, MTN Rwandacell 

is currently involved in building a data network infrastructure, 

starting in mid-2006. MTN began Internet service with GPRS accessed by 



mobile phone or laptop. GPRS, however, has so far demonstrated its limitations 

due to limited bandwidth – maximum bandwidth is 148 KBps 

despite the availability of access over the MTN network. MTN is also 

offering WiMax technology targeting corporate customers. Major new 

network infrastructure development is due to happen in the next two to 

three years with a variety of projects on board such as the Electrogaz 

fibre optic project and the Artel’s new project to expand connectivity 

through the Karisimbi Mast, targeting government institutions as well as 

lower income customers. 

Rwanda still relies on satellites for international bandwidth connectivity. 

The private sector has invested heavily in international bandwidth 

within the last three years due to high demand for Internet access from 

government institutions, such as the central government, education, and 

health sectors which are the major institutions requiring high bandwidth 

capacity. In addition, with the increase of public access points such as 

Cybercafés or Telecentres, the need for high bandwidth for public access 

is becoming a big challenge. The following table shows the increase of 

bandwidth offerings over the last three years. 

TABLE 4: INCREASE IN INTERNATIONAL BANDWIDTH FROM THE OPERATORS’ 

PERSPECTIVE 

Company 2004 (MBps) 2005 (MBps) 2006 (MBps) 

RWANDATEL – TERRACOM 8 16 52 

MTN Rwandacell 2 4 5.5 

ARTEL–New ARTEL 2.5 2.5 2.5 (projected 100 

before the end 

of 2007) 

ISPA * * 3 

TOTAL 12.5 22.5 63 

Source: Interviews with Telecom Operators 

* ISPA was launched in 2006 


19


TABLE 5: INCREASE IN THE NUMBER OF INTERNET SUBSCRIBERS 

Company 2001 2002 2003 2004 2005 2006 

RWANDATEL 1 482 2 047 2 378 2 497 2 484 3500 

MEDIAPOST 0 0 114 130 * * 

ARTEL 0 0 12 28 28 37 

TERRACOM 0 0 0 220 ** 5 200 

MTN Rwandacell 0 0 0 0 0 1 200 

TOTAL 1 482 2 047 2 504 2 875 2 512 6 787 

Source: RURA Annual Report 2004 

* No longer in operation as an ISP 

** No data available for Terracom in 2005 

Subscribers and users are not necessarily one and the same. For example, 

a subscriber has a formal relationship, like a contract or account, 

with an operator. There may be any number of users under a subscriber’s 

account. An Internet café may be one subscription. There may 

be dozens of people who use the café. In 2000 there were only 5 000 Internet 

users with one Internet service provider, Rwandatel. By 2004 the 

number of Internet users had increased from 5 000 to a reported 25 000. 

The use of the Internet for educational purposes is currently limited to 

the higher learning institutions such as the National University of 

Rwanda (NUR), Kigali Institute of Science and Technology (KIST), the 

Kigali Institute of Education (KIE) and the Kigali Health Institute. Computers 

and the Internet remain underused in the school system. While 

many schools now have computers, most schools have no reliable electricity 

or telephone connectivity. The Government started to provide telephone 

and Internet connectivity in 2004 but access to electricity remains 

a problem. 

UNIVERSAL ACCESS 

A number of policies have been adopted by the Government to ensure 

access to telecommunications facilities especially in underprivileged 

areas. To that effect, there is a Presidential order that obliges each operator 

to pay 2% of their turnover (total sales return) exclusive of taxes 

and interconnection fees, to create a fund to be used to expand access to 

rural areas. 



The government plans to decrease the average distance to access a public 

phone from 15km to 2km (or a radius of 2km) within the next five 

years. In addition, the government has decided that all ICT equipment 

(including electrical equipment/generators and solar panels) will be 

exempted from import taxes. This is all aimed at increasing ICT usage 

and more importantly reducing the cost of ICT-related activities, hence 

increasing the affordability of these essential services as we move into 

becoming an ICT hub for the region. 

Looking further at the initiatives made to address the challenge of rural 

connectivity, a company called BCS runs a GSM public payphone network 

called Tuvugane (Let’s Talk), launched in April 2004. It was established 

with the main objective of bringing mobile communication to rural 

communities. It offers per second billing. This project became more successful 

than anticipated in terms of revenues collected, as depicted in the 

table below. It has over 4 000 payphones and is the only company offering 

this service in Rwanda. It buys airtime from MTN and the revenue is 

split as follows: Phone partner: 20%; BCS: 13%; MTN: 67%. 

According to the distribution manager of MTN Rwandacell, 90% of the 

revenue collected is from Kigali, implying that the main objective of 

bridging the digital divide has not been achieved. However, there are 

other initiatives in the pipeline to address this issue; for instance, MTN 

is introducing a project called the “Village Phone” which is to focus on 

the rural areas only, in partnership with the Bangladesh-based Grameen 

Foundation. 

COST OF ICT USAGE 

Tariffs must by law be cost-based. Transparency is the predominant control 

mechanism. Rules are set out relating to the setting of tariffs and the 

Regulatory Board does have powers to intervene. Ongoing tariff control 

is confined to the dominant operator. 

TABLE 6: AFFORDABILITY OF ICT SERVICES 

Affordability Rwanda Low-Income Sub-Saharan 

Group Africa 

2000 2004 2004 2004 

Basket for fixed line 8.4 7.9 6.6 8.5 

(US$ per month) residential 

Basket for Mobiles 24.8 11.6 13.5 

(US$ per month) 

Basket for Internet 66.8 45.5 54.8 

(US$ per month) 

Price of 3-minute call to 11.23 2.45 1.95 2.43 

the United States: (US$) 

1 Source: World Bank ICT at a Glance 

2 


21


To test the effect of lack of controls on prices the World Bank ICT at a 

Glance affordability data is compared to the figures for other parts of 

Africa. The drop from US$8.4 to US$7.9 places Rwanda 19.6% above 

the Low-Income Country Group average of US$ 6.6 but below the sub- 

Saharan African Region level of US$8.5. For mobiles the Rwanda basket 

was US$24.8 per month, 112% above the Low-Income Country 

Group average of US$11.6 and 84% above the sub-Saharan African 

Region level of US$13.5. A similar pattern existed for the Internet 

where Rwanda was at US$66.8 per month, 47% above the Low-Income 

country group average of US$45.5 and 22% above the sub-Saharan 

African Region level of US$54.8. 

TABLE 7: SELECTED TARIFFS RWANDA 

Prepaid Mobile Prepaid Mobile Prepaid Mobile 

to MTN – 3 mins to Nairobi – 3 mins to Fixed – 3 mins 

MTN Peak 417 885 417 

MTN Off Peak 354 885 354 

Terracom “illimité” 264 1 125 264 

Terracom Mobile 270 1 125 270 

Artel 360 1 140 360 

1 Source: MTN (web site), Terracom (web site), Artel (interview) 

Despite requirements that costs be priced based, using the OECD basket 

for low mobile users to measure RIA!’s comparative analysis of pricing 

across several African countries demonstrates that prices in Rwanda 

are the fourth highest of the 17 countries reviewed, although Rwanda’s 

combined mobile prices appear very low in nominal terms when adjusted 

for purchasing power parity, which provides a real assessment of affordability. 

There are obvious caveats to the pricing in the table, as all markets are 

not evenly liberalised or tariffs rebalanced. So the very low prices in 

Ethiopia, for example, accompanied also by very low penetration rates 

are unlikely to reflect cost-based prices. 



TABLE 8A: COMPARATIVE ASSESSMENT OF MOBILE PRICING ACROSS 17 

AFRICAN COUNTRIES 

TABLE 8A: COMPARATIVE ASSESSMENT OF MOBILE PRICING ACROSS 17 

AFRICAN COUNTRIES 

Source: Esselaar, Gillwald and Stork (2007) 

For a 3-minute call to the United States there was a dramatic decline in 

prices between 2000 and 2004 and Rwandatel rebalanced prices. The 

price fell by 78% and is now comparable with the prices in the Low- 

Income Group (US$2.45 compared with US$1.95 or 26% higher) and virtually 

equivalent to the sub-Saharan level of US$2.43. The absence of 

price controls has not prevented the prices of calls to the US from falling 

by 78% as a result of competition between the two major competitors, 

MTN and Terracom and the usage of VoIP specifically for outgoing calls 

to the US. Fixed-line charges have fallen by 6%, placing them just above 

the Low-Income Group average and just below the sub-Saharan average. 

The table contained no prices for the Internet in 2000. In 2004, Internet 


23


prices in Rwanda were well above the average for both of the other 

groups. However, it should be noted that prices in Rwanda have fallen 

since 2004, but this has probably also been true elsewhere. 

Telecommunications Regulatory 

Environment 

A policy and regulatory perception analysis drawing on the Telecommunication 

Regulatory Environment (TRE ) methodology developed by 

LIRNEasia was conducted among Rwandan industry stakeholders. 6 The 

telecommunications regulatory environment survey seeks to assess not 

just the regulator, whose ability to reduce regulatory risk and enable 

market development is to a significant degree determined by the policy 

and legal framework. 

Twelve interviews were conducted with representatives from telecom 

operators, ISPs (MTN Rwanda, Terracom and Rwandatel), government 

institutions (RITA, Ministry of Infrastructure) and academic institutions 

(NUR and KIST). They were asked to rank the Telecom Regulatory Environment 

on a scale of 1 to 5, with 1 being highly ineffective and 5 being 

highly effective. The three broad areas covered were Fixed, Mobile and 

Value Added Network (VANs). The following table gives a summary of the 

responses. Note that only results for Fixed and Mobile appear in the 

table below as there are currently no regulations in place for VANs. 

TABLE 9: TELECOMMUNICATIONS REGULATION ENVIRONMENT ASSESSMENT 

6 Studies using this method have, subsequent to the Asian studies, been carried out in Chile and 

Guatemala (see www.regulateonline.org ). 



TABLE 9: TELECOMMUNICATIONS REGULATION ENVIRONMENT ASSESSMENT 

The overall telecommunication regulatory environment in Rwanda is 

negatively perceived, due to the following factors: 

Lack of understanding of the respective roles of each of the key players 

in making the regulatory environment more transparent and effective. 

The inception of the Policy framework for regulation appears to have 

been more donor driven and therefore has lacked participation of local 

stakeholders to raise the ownership; 

Delays in action by RURA, the multisector regulatory authority. RURA 

has been understaffed and lacking in capacity, and the previous years 

have seen rapid changes in the telecom environment, which required 

rapid responses. The lack of capacity to respond to regulatory issues in 

a timely fashion have allowed incumbents to continue with certain anticompetitive 

practices and weakened perceptions in the industry; 

Failure of fixed line services to respond to the growing demand in the last 

12 years. The demand at some points has been even higher than the 

existing phone lines in operation while the incumbent was regulating the 

sector, while for mobile services, MTN has enjoyed its monopoly for many 

years with a very high cost of access and usage coupled with low penetration 

rate. This situation alone explains the bad perception that is 

recorded as far as mobile services are concerned. 

In comparison with other African countries the negative perception of 

Rwanda was the highest. Of the 14 countries in which perception surveys 

were conducted. Rwanda however was not alone. Only two countries, 

Nigeria and Côte d’ Ivoire were viewed positively. 


25


Source: Esselaar, Gillwald and Stork (2007) 

The main regulatory challenges can be described as follows: 

REINFORCEMENT OF THE REGULATORY LAW 

The Rwanda Utility Regulatory Agency needs to be legally supported in 

such a way that it is more independent, thereby strengthening its authority. 

This is of paramount importance if we are to see its management 

deliver. Furthermore, the country is moving towards full competition in 

mobile, fixed and Internet services; however, a number of contentious 

issues continue to arise amongst the players. Revision of the existing law 

that will provide the regulator with more power to act and respond to 

emerging issues is needed. This would create more faith, confidence and 

trust in the regulator by all key players and the community of users in 

particular. 

IMPLEMENTATION OF UNIVERSAL ACCESS 

OBLIGATION 

As stated above, universal access in theory has all the required legal support 

needed including laws and a Presidential order. The main challenge 

is to put the universal access obligation into action to help address the 

market access gap that the country is facing. The ongoing consultancy 

in this regard and consultative meetings amongst the stakeholders 

based on the final report are expected to provide a road map towards 

real implementation of universal access in Rwanda. 

INTRODUCTION OF NEW TECHNOLOGIES 

SUCH AS VOICE OVER INTERNET PROTOCOL 

(VOIP) 

The emergence of new technologies and services such as VoIP brings up 

regulatory challenges for which RURA needs to provide guidance and 

solutions. The current situation is that VoIP is not yet regulated and yet 



is being used by numbers of providers. While the main telecommunication 

operators such as MTN are complaining about what they call 

abuses, the main Internet Service Provider Terracom is also complaining 

against MTN for blocking IP traffic. 

ACCESS AND AFFORDABILITY GAP BETWEEN 

URBAN AND REMOTE AREAS 

Previous studies, including the household survey made in 2004 and the 

current data available from the major telecommunications companies, 

reveal the disparity of the level of access between urban and rural areas. 

As an illustration, the current MTN Network is estimated to cover 75% 

of urban areas and main roads in the town. Remote sites outside the 

above geographical locations are not yet covered. Estimated penetration 

of mobile is 60% in the capital city of Kigali and 40% for the rest of the 

country. 

There is a need to expand network coverage as well as increase penetration, 

especially in the areas that are relatively populated with little economic 

activity that can integrate communications services in their 

strategies and daily businesses. Traditional fixed services over copper 

or wireless have declined over the past ten years. Decline is likely to continue 

over the coming years. The only possible alternative will be the 

introduction of the Voice over Internet Protocol (VoIP) in addition to 

wireless local loop. 

Appropriate technologies such as solar energy, as well as wireless local 

loop through WiMax or Wifi could be useful in remote areas that have 

suffered from the lack of basic infrastructure such as electricity and connectivity, 

to have faster access to communications. The introduction of 

VoIP in remote areas can only succeed if the telecommunications market 

is restructured with a clear separation between network infrastructure 

providers and service providers. The proposed segmentation of the market 

could therefore allow either small-scale private or community service 

providers to enter into the market, especially in the areas where the 

major telecommunications companies are not likely to operate as service 

providers. 

The above scheme will require review of the regulatory licensing regime 

and will bring in provisions to support and facilitate the establishment 

of small-scale enterprises in remote areas to provide a range of services 

like voice, data and other related applications to promote the creation of 

an information-based society in underserved areas. The financing mechanism, 

one of the major challenges, has to be studied carefully to ensure 

that the cost of infrastructure investment as well as its operational cost 

will allow a service pricing scheme that is affordable and sustainable 

over time, despite the withdrawal of external financial support. The main 

and initial source of funding is obviously the Universal Access Fund 


27


(UAF) that is contributed by the telecommunications companies. The 

UAF could be complemented to some extent by a low interest loan from 

any development bank such as the Rwanda Development Bank (BRD) or 

Micro Credit/ Micro Finance Banks. 

As Table 8 demonstrates, affordable telecommunications services are 

critical to developing countries in general and sub-Saharan African 

countries in particular. A recent study carried out by MTN group has 

shown a correlation between the number of subscribers and GDP of a 

given country. A close look at the graph below reveals that the lower the 

GDP of a given country the lower will be the mobile penetration. However, 

a country like Guinea, whose GDP is lower than that of Rwanda, has 

a high mobile penetration level. In the case of Rwanda, only 10% of the 

population lives in the urban area and 60% of the mobile subscribers are 

in the urban area. The implication of this is that the mobile penetration 

is only 3% country-wide, which is the lowest in the region. 

TABLE 10: TELECOM MARKETS IN DEVELOPING COUNTRIES: WHERE DO 

UGANDA AND RWANDA STAND? MOBILE SUBSCRIBER BASE AND PENETRATION 

Source: MTN Rwanda 

The Government is undertaking various projects that will solve these 

challenges. The following section details the major projects that are 

being carried out both in the public and the private sectors to address 

the access and the cost of usage issues. 

2 Source: www.mcel.co.mz 



Implementation of ICT Policies 

and Projects: Current Status and 

Ways Forward 

There are a number of ICT Policies and related projects that are currently 

being implemented in Rwanda, including the following: 

RWANDA INTERNET EXCHANGE POINT 

The high cost of international bandwidth for the Internet has limited the 

growth of Internet in developing countries. At the same time the quality 

of Internet services is undermined by traffic delays. One reason is that 

ISPs in developing countries use international bandwidth for their 

national as well as international traffic. If there is local interconnection, 

where traffic originating from one local ISP intended for another local 

ISP does not have to leave the area or country to reach its destination, 

the problem is resolved. 

This switch providing local interconnection is referred to as the Internet 

Exchange Point (IXP). RINEX was a project that established an Internet 

Exchange Point in Kigali and connected as many ISPs as possible. Peer 

connection between ISPs without passing through international links 

would enhance the quality of Internet services and save bandwidth and 

money. It was implemented successfully as part of the Communication 

Systems Design 2004 course at the Royal Institute of Technology (KTH) 

in Sweden and sponsored by the Swedish International Development and 

Cooperation Agency (SIDA). All the local ISPs in Rwanda are connected 

and a full mesh has been implemented. A sustainability plan has been 

produced and the ISP staff have been trained to manage the IXP. 

E-RWANDA PROJECT 

In June 2005 the Government of Rwanda approached the World Bank to 

fund an e-Rwanda project, designed to help implement components of 

the NICI Plan II. It was decided that a stand-alone project was preferable 

because of the special skills required. Accordingly, the Bank has agreed 

to fast-track the project provided the GoR can provide the necessary 

counterpart resources. The Project has been refined to four components: 

 

Strengthening Government Effectiveness. This component aims at 

improving key governmental internal systems which are considered 

critical elements for the implementation of the overall development 

strategy of the Government. The main focus of this component will be 

complementary support for the development and deployment of a 

modern integrated public financial management system that provides 

timely and accurate information about the use of public 

resources and for the implementation of a public procurement and 


29


assets management system that is in line with international standards. 

 

 

 

Service Delivery Improvement for Citizens and the Private Sector. 

This component will assist government to deliver improved services 

to citizens and the private sector. It will target primarily business 

licensing and citizen’s life cycle events such as birth, marriage and 

death certificates. These services will be subjected to a re-engineering 

process with the goal of improving access and service standards. 

Improving Physical Access to Services through enhanced Infrastructure 

in Energy and Telecommunications. This component will assist 

government in developing and refining the basic regulatory and institutional 

infrastructure required for the use of modern technology by 

the public and private sectors. It will particularly promote the provision 

of competitive and affordable telecommunications access for 

remote areas of Rwanda. 

Project Management. The component will assist government to establish 

a project management system for the change process triggered 

by the implementation of the aforementioned reforms. Support will 

focus primarily on the Ministry of Infrastructure which will lead the 

implementation of e-government reforms and on its implementing 

agency RITA. The project will also cover the setting up of an adequate 

quality assurance mechanism to accompany the implementation of 

the reforms as well as the development of a monitoring and evaluation 

system for e-government reforms. 

All the above will have a direct impact on the social fabric of society by 

addressing the service delivery and information needs of the rural population 

and strengthening the underlying legal and regulatory framework 

for development of Vision 2020. The project is World Bank funded 

and was declared effective in August 2006. It is currently being implemented 

under the RITA structure. 

GOVNET 

This is a private network interconnecting the Local Area Networks 

(LANs) of individual government ministries, agencies and various Public 

Service Organisation (PSO) networks within Kigali. Currently, fibre 

optic cable is employed by GoR units in different clusters, such as 

Kacyiru in the District of Gasabo and downtown Kigali in the District of 

Nyarugenge, with wireless bridges interconnecting the clusters. Currently 

the hardware is in place, but the software and system management 

are not yet in place. Complete end-to-end connectivity between government 

units in Kigali and local authorities in the provinces is the next 

phase planned for GovNET’s development. 

ICT PARK 

In view of the various activities in Rwanda, it is apparent that the country 

must evolve into a knowledge society if such a transformation occurs 

at the planned pace indicated. In his address at the WSIS summit, His 



Excellency Paul Kagame stated “it has become abundantly clear to us in 

Africa that ICT is an indispensable tool in the achievement of our development 

goals.” 7 

Therefore, one can believe that a vibrant ICT private sector is paramount 

for Rwanda to harvest the promise of a national ICT Plan. Although government 

leadership is necessary, only private sector firms can help 

Rwanda successfully compete in ICT. In May 2006, Rwanda’s leadership 

made the bold decision to establish a Rwanda ICT Park in Kigali. A catalyst 

for innovation, this ICT Park will become the platform for Rwanda’s 

nascent ICT private sector. From its original building, Telecom House, 

Rwanda ICT Park will evolve into a multi-hectare ICT hub with several 

office buildings, ICT training institutions and outsourcing amenities 

located at the heart of Kigali. Rwanda ICT Park will ultimately become 

the main driver of Rwanda’s evolution into an ICT society and will 

mature into a regional hub for ICT innovation. 

ICT Park aims to become a vibrant ICT centre that provides ready access 

to world-class ICT products and services for Rwanda and the region, 

facilitate Rwanda’s participation in the development of new and emerging 

ICT products and services, focuses on serving as an incubator for 

promising start-up ICT firms and finally, facilitate Rwanda’s leadership 

in ICT research and development. There have been about 10 companies 

selected that are already operating in the park. 

NATIONAL COMPUTING CENTRE (NCC) 

This is one of the technical directorates of RITA, established and supported 

by the Swedish Government, providing ICT technical support, 

applications development, detailed short-term professional training, 

consultancy services and research and development in software engineering. 

NCC hosts the National Data Centre that provides a useful clearing 

house for government entities. Furthermore, it runs critical government 

applications systems such as the National ID card platform, SmartGov, 

human resource systems as well as offering feedback and information 

about government services and information to citizens. NCC hosts government 

websites, web portal and email services for civil servants. 

NATIONAL ICT INFRASTRUCTURE DEVELOP- 

MENT 

With the Rwandan economy undergoing rapid change and competition 

among enterprises, there is a trend toward the construction of proprietary 

networks. Typically these networks are designed to carry only the 

owner’s calls, including terminations of calls from other networks. Currently, 

however, there is some sharing of facilities. 

7 http://www.gov.rw/government/president/speeches/2003/remarks_geneva_speech.html 


31


Duplication of networks can create excess capacity due to the limited 

number of customers, design limitations and the cost of management, 

maintenance and repairs, which may make service unit costs high. 

Unused capacity increases the cost of providing network services in two 

ways: (1) investment takes place above the level necessary to meet consumer 

demand, increasing the capitalisation of the sector (and lowering 

the overall rate of return on capital), and (2) by reducing the potential 

business available to each network below the level used to justify the 

investment. Both of these effects increase the real cost per unit of transmission 

and limit the scope for price reductions. 

TELEMEDICINE NETWORK 

Telemedicine Network is a backbone network linking national referral 

hospitals and laboratories throughout the country. Development of the 

telemedicine network is included in the NICI plan II with the objective of 

expanding accessibility to health services and enabling unlimited 

exchange of data between different hospitals. Institutions affected 

include: 

University Central Hospital of Kigali; 

University Central Hospital of Butare; 

King Faysal Hospital, Kigali; 

Cyangungu Hospital; 

National Pharmaceutical Laboratory; 

Ruhengeri Hospital. 

RWANDA EDUCATION AND RESEARCH NET- 

WORK 

The Rwanda Education and Research Network is a high capacity network 

over mainly fibre optics linking local area networks of various 

higher learning institutions and research centers for common internet 

connectivity, general research exchanges, administration and e-learning. 

The first phase affects public higher learning institutions and 

research centres as follows: 

National University of Rwanda (NUR), Southern Province; 

Kigali Institute of Education (KIE), Kigali; 

Kigali Institute of Science and Technology (KIST), Kigali; 

Kigali Health Institute (KHI), Kigali; 

Higher Agriculture and Veterinary Institute (ISAE), Northern 

Province; 

School of Finance and Banking (SFB), Kigali. 

In addition, there are two research centres which are: 

Institute of Agricultural Science of Rwanda (ISAR), Southern 

Province; 

Institute of Research in Science and Technology (IRST), Southern 

Province. 

Private higher learning institutions (about 10) spread across the country 

are also being considered for inclusion in the second phase of the 

Rwanda Education and Research Network. 



KARISIMBI PROJECT 

The GoR has launched various projects for fibre optic deployment 

notably the fibre deployment exercise running parallel with electrification 

of Mount Karisimbi summit. As at February 2006, a total of over eight 

kilometres of ADSS aerial and underground fibre segments had been 

deployed by Terracom (the subcontractor). The underground segments 

run through a national park for safety and environmental reasons. Further 

segments are expected to be deployed in the Mount Jari area. The 

GoR’s fibre is shared by multiple stakeholders (ORINFOR, Terracom, 

MINADEF, and MTN Rwandacell). 

The existing tower at Karisimbi is being rehabilitated to prepare it for 

being used in efficient ways by different stakeholders and operators, 

mainly Orinfor (eg usage of the Orinfor tower at Karisimbi as a CDMA 

and transmission site). 

ELECTROGAZ FIBRE OPTIC PROJECT 

The electricity utility which is referred to as Electrogaz needs communications 

among its staff to enable the efficient provision of power and 

water supply to its customers. Currently there is an Intranet Private 

Branch Exchange (IPBX) that provides services between the headquarters 

and eight branch offices. There is a need for networking to support 

the performance, monitoring and control systems of the power/water 

transmission and distribution networks. For instance, a Supervisory, 

Control and Data Acquisition (SCADA) system is planned to span the 

main power distribution network with technical user interface points at 

different power stations, substations and control centers. 

In March 2006 Electrogaz signed a contract based on a technical proposal 

from Draka Comteq Telecom BV. The contract depends upon both 

grant and commercial funding. The contract will become effective and 

construction will begin when grant financing has been arranged, nongrant 

financing has been authorised, the advance payment received by 

Draka, and bank guarantees finalised. If all conditions are met 825km of 

Synchronous Digital Hierarchy (SDH) fibre will be deployed across 

Rwanda using Electrogaz’s power transmission network, shown in Figure 

1. 

The network will connect 21 existing power generation plants and all 

substations, including the control centre at Gikondo. It will provide IPBX 

telephones and related power supply, also SCADA and Internet Message 

Services (IMS). In the proposal, Optical Ground Wire Cables (OPGW) are 

suggested for the high voltage (110 kV) routes (from Gifarwe to Mururu 

II via Mount Kigali stations, total 372km), while ADSS cables would be 

placed on the medium-voltage (30 and 70 kV) routes (connected from 

Gifarwe, Jabana, Mount Kigali, Kigoma, Karongi and Mururu I/II stations, 

total 404km). 

Extension and electrification of the communication system of the 

national electricity transmission grid will mean implementation of an 


33


Optical Ground Wire (OPGW) Scada control system on the entire 110 kV 

and 70 kV transmission system with extensive excess capacity. 

FIGURE 1: ELECTROGAZ FIBRE NETWORK AS PROPOSED BY DRAKA 

EAST AFRICAN SUBMARINE CABLE SYSTEM 

(EASSY) 

EASSy is a proposed project to link seven coastal countries in East 

Africa, including: Djibouti, Kenya, Madagascar, Mozambique, Somalia, 

South Africa and Tanzania (the “EASSy anchor countries”) with a fibre 

optic cable. In addition, 15 other East African countries, including 

Rwanda, wish to connect to EASSy through terrestrial cables. Rwanda 

will be connected by the East Africa Backbone System (EABS) shown in 

Figure 2. The estimated cost of EASSy is US$300 million and an additional 

US$300 million for the connection of the 15 inland countries. The 

GoR has agreed to commit US$10 million to the project. 

The initiative will improve the connectivity of the region to the rest of the 

world for both voice and data communications. Instead of paying high 

charges for international connection through a transit point, operators 

in the region can establish direct connections, which promises decreases 

in operating costs for international telecommunications. This further 

implies other important benefits to the ultimate African consumers and 



businesses through substantial price reductions for both voice and Internet 

services. In the longer run, the benefits of improved connectivity and 

improved competition will foster the economic and social development of 

the region through increasing its competitiveness and its attractiveness 

to foreign investors. EASSy’s main problem for Rwanda is that when the 

initial designs of the project were being considered Rwandatel was still 

a state-owned entity. It would have been the logical counterpart for the 

project. Now the position is not so clear. In fact, so far MTN is the only 

party to commit formally to the project. Meanwhile the “new” Artel company 

supported by the government is likely to be the main counterpart 

for EASSy especially since the company’s main focus is the development 

of network infrastructure and its deployment to government and nongovernment 

institutions on a wholesale basis at affordable prices. 

FIGURE 2: THE PROPOSED EASSY EABS 

Assessment of National Infrastructure 

Development Projects 

RWANDA SHARED OPTICAL BACKBONE 

The design for a Rwanda Shared Optical Backbone (RwaSOB) network 

has not yet been completed. The situation in the private sector is changing 

rapidly and if the Electrogaz contract with Draka is brought to 

fruition, it could drastically alter the requirements of a RwaSOB and 

could even make a whole new network redundant. Similar problems 

arise with respect to EASSy. 


35


The principal question to be answered is: having extracted itself from 

investment in telecommunications at the retail level, how far does the 

government want to go to re-enter the market at the wholesale level? 

Should the government decide that investment in a RwaSOB is a good 

idea? Another element to be considered is the network-sharing model 

desired by each stakeholder. Issues that will arise include governance 

arrangements (including RwaSOB, Electrogaz and the private sector), 

tariff setting as well as interconnection arrangements, capital expenditure 

and/or operating expenditure sharing, shared revenues from leased 

excess capacity, payment for network transmission services or one-off 

payments and management arrangements, with options including selfmanaged, 

independent carrier-managed provisioning and joint venture 

arrangements. 

Any investments made in unserved areas where the potential number of 

customers is small should be handled within the framework of the UAF 

policy already announced and enshrined in Ministerial Decree No 5 of 

15/03/2004 determining the functioning of the Universal Access Fund. 

This study has to deal with the reality that Rwanda will soon have two 

or even three nationwide mobile telephone and broadband networks 

offering a full range of services. The critical issue is to ensure cost minimisation 

(or efficiency of investment), seamless interconnection and 

high quality services. 

PUBLIC SECTOR 

While the proposed development of the sector provides a range of possibilities 

in the future, the current situation with respect to physical and 

commercial access is as follows: 

GOVNET 

So far interconnection arrangements are not in place, but when up and 

running GovNET will require access to backbone infrastructure for 

national and international services. This is a private venture, but it is 

focused on government services. 

TELEMEDICINE NETWORK 

Developing this network is in the NICI II plan. It is not clear which service 

will finally comprise the network offering. It is anticipated that data 

transmission over leased lines, or wholesale capacity, will be the main 

service, with limited capability for international traffic. Interconnection 

will be required but is unlikely to present particular problems. 

RWANDA EDUCATION NETWORK 

As a high capacity network linking networks of various higher learning 

institutions for general research exchanges, administration and e-learning, 

the critical element is bandwidth. Access to the backbone is likely to 

be commercial and not controversial. 



OTHER SIMILAR NETWORKS 

Networks to cover all service areas are expected for the nationwide justice/court 

system and security forces. They are separate from Government 

to Business (G2B) networks. Currently, the government is expected 

to look at the Electrogaz network to provide this service and interconnection 

is unlikely to be an issue. 

MOUNT KARISIMBI 

The Government’s fibre is being shared by multiple stakeholders and 

there appears to be no particular problem of access to either the Terracom 

or MTN networks. Commercial arrangements have determined relationships 

so far. 

ELECTROGAZ 

Electrogaz’s 825km of fibre infrastructure will be the largest single contributor 

to the backbone. However, interconnection, governance, commercial 

arrangements and technical management will determine the 

extent to which it is used by the private sector. As it will be a wholesale 

to business only, there will be an incentive to interconnect with all available 

customers. 

PRIVATE SECTOR 

TERRACOM 

Commercial considerations will lead Terracom to consider leasing circuits 

from either RwaSOB or Electrogaz, particularly on main trunk 

routes. The commercial access arrangements will be the deciding factor. 

As a company offering both wholesale and retail services it has an incentive 

to market wholesale service, but deny access for competitors to 

retail customers, particularly across the local loop. The wholesale marketing 

department will face pressure from the customer services (retail) 

business to favour their needs over the needs of competitors. Even regulatory 

provisions requiring access can be frustrated by the inevitable 

conflict of interests. 

MTN-RWANDACELL 

To develop services MTN will need to lease circuits in major population 

centres that close microwave rings, increasing protection against network 

failure. If high quality Service Level Agreements (SLAs) can be 

relied upon, then the leasing circuits from any provider of backbone services 

would be commercially attractive to MTN. Currently MTN possesses 

very little fibre, but will need to install more if access is denied, 

obstructed or unreliable. 

ARTEL COMMUNICATIONS 

Artel currently needs to expand the reach of its existing VSATs or configure 

them into a mesh network by combining the use of VSATs with terrestrial 

broadband wireless and fibre-optic backbone. Financial outlay 


37


and potential return requirements are critical issues. The option of leasing 

circuits from any backbone provider is considered feasible. Similar 

arrangements exist already with microwave circuits leased from Terracom 

and MTN Rwandacell. The company is heavily invested in satellite 

connectivity and is planning to acquire around 100 MBps bandwidth to 

serve their ISPs as well as government and non-government institutions. 

The company will also invest in terrestrial network backbone in order to 

reach out its customers. The key issue is the regulatory changes that are 

needed to introduce horizontal licensing in order to facilitate the emergence 

of wholesale and retail markets. 

Conclusion and 

Recommendations 

The overall performance of the sector can be characterised by two major 

aspects. Significant progress has been made both in policy and regulatory 

reforms that locate ICT as an engine for poverty eradication as a 

whole and a catalyst for socio-economic development across the various 

sectors of the economy in particular. Important issues and challenges to 

increase access, penetration and usage of ICT, however, remain across 

the various segments of society. 

The reforms adopted have seen a number of changes in the telecommunication 

market with the entrance of new players and introduction of 

new technologies and services to meet market demands. Public and private 

investment in network infrastructure development have significantly 

increased and are expected to grow over the coming five years 

within the framework of the NICI II Plan. 

Accessibility indicators shown in this report, however, remain very low 

despite the emphasis on increasing accessibility and usage of ICT in the 

country. The major reasons for such gaps are primarily related to the 

high cost of setting up network infrastructure and its maintenance, particularly 

in the current context of shortage of electricity that leads to the 

high price of access as well as usage, especially for mobile and internet 

services. 

Rwanda Information Technology Authority (RITA) has begun a dialogue 

with major telecommunication operators initiated by government, which 

aims to define an innovative model of sharing network infrastructure. 

This sharing model is expected to reduce considerably the cost of network 

access and therefore will allow new service providers to enter into 

play with the hope that the price of usage will decrease, thereby increasing 

the number of users providing services especially in remote areas. 

The NICI II Plan has ambitious programmes and projects to support the 

increase of ICT access and usage around the country. The main target is 

to allow the central and local governments to communicate through ICT 

means in order to enhance good governance as well as to provide efficient 

services to the general population through Internet based applica- 



tions. However, the main concerns remain the lack of institutional capacity 

and expertise to support the implementation of the NICI II Plan. The 

main public and private agencies faced with these challenges, including 

RITA, RURA and ICT service providers, still face severe shortages of 

personnel with the technical skills and expertise required to achieve the 

goals of the NICI II Plan. 

In view of the above, the following would be the proposed course of action 

to address these issues. Above all there is need to strengthen institutional 

capacity. The current circumstance of the major institutions 

involved in ICT development leave a lot to be desired. A number of 

changes must be made in order to make them more competent to accomplish 

their mandates and responsibilities on a daily basis. 

The main challenges to overcome include the implementation of a clear 

demarcation between the Ministry in charge of Communications and 

Energy, RURA and RITA in order to streamline their respective interventions 

in accordance with the laws and policies that govern ICT development 

in Rwanda. The redefinition of roles and responsibilities of each of 

the above institutions will help to identify skills and expertise needed for 

each one to fulfill its mission in line with the NICI II Plan, as well as help 

to strengthen their relationships with each other in order to provide better 

services. 

The issue of access to and affordability of ICT services will be addressed 

by the development of network infrastructure across the country supported 

by private and public initiatives. This is an important milestone 

towards the realisation of wider access to ICT services for the general 

population. The cost of network access remains the main challenge to 

increasing ICT usage and penetration. It is therefore paramount to put 

in place a proper procedure for the sharing of network infrastructure 

amongst the major telecommunication operators, in order to reduce the 

cost of access and hence encourage new service providers in an open and 

competitive environment. 

Furthermore, to improve ICT access for low income and remote areas, 

there is a need to increase participation of the community in the development 

and deployment of ICT in the country. The process will involve 

promoting great awareness of the potential benefits of ICT as a crosscutting 

tool to support development in the various sectors of the society, 

as well as poverty eradication. The full participation of the community in 

the management and maintenance of ICT services can provide an alternative 

for increasing ICT access and usage for low income and remote 

areas in general. This will require a number of regulatory reforms to 

allow small scale enterprises to get involved in the areas where major 

service providers are not present and will also require significant 

changes in the provision of licences to facilitate access to the networking 

of services on a cost based model. 

 


39


ANNEXE 1 

Major Milestones in the ICT Sector Development in Rwanda 

1994 – 1997 1998 – 2000 2001 – 2006 2007 – 2010 

Law Law N 39/2001 of 13/09/2001 Review of the 

creating the Rwanda Utilities 

Regulatory Agency (RURA) 

Law N 44/2001 of 30/11/2001 

establishing Telecommunications 

Laws: The law grants the 

TelecommunicationsLaw 

of 

2001 by the 

Ministry of 

Infrastructure 

Republic the authority to regulate in 2006 

telecommunications and set up a 

regulatory board to carry out 

that function 

*Law N 32/2002 of 02/10/2002 

creating the Rwanda Information 

and Technology Authority (RITA) 

Policy * No stated policy ICT 2020 Vision Review of the Implementation of 

as such.Rwandatel NICI Plan I as the NICI Plan I the NICI PLAN II. 

is the only telecom policy instrument. Drafting of 

operator. Tried to 

recover the telecom Infrastructure 

and replace 

damaged equipment 

NICI PLAN II 

Poverty Reduction 

Strategic Programme (PRSP) 

*EDPRS (Drafting) 

Regu The Ministry of Transport The Ministry of Transport *Establishment 

lation and Communications and and Communications of theRwanda Utility 

Rwandatel take up the role and Rwandatel take up Regulatory Agency 

of regulator the role of regulator (Multi-sector regulation) 

Market Monopoly Entrance of a mobile Entrance of three ISPs New National 

Struc- operator Rwandatel (Terracom, ISPA, Artel) Backbone and 

ture runs an ISP Establishment of Artel Carriers to come 

Public monopoly on communications as a on board 

fixed private lines Telephony over VSAT Artel to become 

Monopoly on Provider a full ISP 

mobile service. MTN obtains fixed Electrogaz (power 

and Internet licences 

Rwandatel privatised 

and owned by Terracom 

company) to estab- 

lish a utility to 

manage the fibre 

MTN to become a 

data carrier using 

its fibre backbone 

as well as WiMax 

Number One player: Rwandatel Two major players: Four major players: Potential new e 

of Players Rwandatel and Rwandatel, Terracom, MTN entrances: 1. ISP 

MTN Rwandacell Rwandacell and Artel 2.Carrier 

3.ASP 

Ser Fixed telephony *Fixed, Mobile *Fixed, Mobile Potential new services 

vices and Internet and Internet 

Average 

Projections: 

Sub 14 000 -Fixed: 19 000 -Fixed: 21 687 Fixed: 32 000 

scribers -Mobile:42 000 -Mobile: 304 000 Mobile: 800 000 

-Internet: 1 200 -Internet: 6 814 Internet: 20 000 

Sources: RITA, RURA, MININFRA, Rwandatel 



REFERENCES 

BALANCING ACT (2006). Top Story: Rwanda a Small Country with a Strong Desire to Succeed. 

Balancing Act’s news update 309 (11th June 2006). http://.www.balancingact-africa.com/news/- 

backindex.html 

Butcher, D et al (2006). Review of the Regulatory, Policy and Competitive Framework of the ICT 

Sector in Rwanda; Strengthening Legal and Regulatory ICT Framework and Governmental 

Institutions. 

Esselaar, S, Gillwald, A & Stork, C. (2007). Telecommunications Sector Performance in 16 African 

countries: a supply side analysis of policy outcomes, Research ICT Africa!, LINK Centre, Witwatersrand 

University, Johannesburg. http://www.researchICTafrica.net 

Esselaar, M et al. (2001). A country ICT Survey for Rwanda. Department for Research Cooperation- 

SAREC. 

Framework Document (1999). Rwanda ICT 2020 Vision 

ITU (2003). World Telecommunication Development Report. http://www.itu.int/ITU-D/ict/pulications 

/wtdr_03/index.html 

Law No 44/2001 Governing Telecommunications in Rwanda 

Mutabazi, JB. (2006). Presentation on ICT Status in Rwanda. 

NICI II (2006-2010). The National Information Communication Infrastructure Plan 11 

Nsengiyumva, A et al. (2005). The East and Central Africa Global Competitiveness Trade Hub. 

Implications for Rwanda of Accession to the World Trade Organization’s Information Technology 

Agreement. Submitted to the ECA Hub. 

Nsengiyunva, A. (2004). Rwanda ICT Sector Performance Review. www.researchictafrica.net 

RIA ! Publication. (2005). ICT Sector Performance Review. www.researchictafrica.net 

RURA Annual Reports (2004, 2006). 


41

For further information see http://link.wits.ac.za 

Tel:+27 11 7173913 

Fax:+27 11 7173910 

LINK Centre 

Graduate School of Public Development Management 

Witwatersrand University 

Johannesburg 

Box 601, Wits, 2050 

http://link.wits.ac.za 

This Policy Research Paper Series is made 

possible through the support of the 

International Development Research Centre 

(IDRC)

Rwanda Telecommunications Sector Performance Review 2007

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?