Telecoms: 2015 a year of innovation, tight competition and uncertainty
The year of 2015 has been witnessed as a year of innovation, tight competition but also uncertainty within the telecom sector, one of the countryâ€™s budding sectors.
The industry began the year with the approval of the cross border mobile money by Central bank in February which was delayed since June, 2014 paving yet another revenue window for the telecoms.
But also in the operators who ushered in 2015 with call rates battles that were introduced in the last quarter of 2014 which saw Airtel Rwanda introducing yet another call pack for off net calls promoting TigoÂ to follow suit midyear with MTN also bending low to introduce the same.
This further heightened the competition that shielded consumers from spending more in June, 2015 when operators hiked both off net and on net calls after the dwindling voice revenues.
According to the sectorâ€™s regulator Rwanda Utilities and regulatory Authority-RURA, the three telecomsÂ hiked call tariffs for both off net and non-net in June 2015
Statistics indicate that the market leader MTN pushing up its on net to Rwf46 per minute in June, 2015Â from Rwf36 in June 2014, keepingÂ Â constant off net at Rwf60, TigoÂ increased on netÂ to Rwf34 per minute fromÂ Rwf25 in JuneÂ 2014 withÂ off net from Rwf55 per minute to Rwf60 and Airtel increasing from Rwf20Â per minute to Rwf28 with off net from Rwf60 to Rwf62 per minute.
â€œThe off net tariff which was supposed to decrease following the decrease in interconnection tariffs remained the same,â€ said Jean Baptist Mutabazi head of Media and communication at Rwanda Utilities Regulatory body.
He says that the increase in off net despite aÂ reduction in theÂ interconnection fees was as a result of excise duty that rose from 8 percent to 10 percent in 2015.
Indeed, the increase called for moreÂ creative ways for telecoms to ensure thatÂ they donâ€™t lose subscribers to either side prompting them- operators to design innovative products, making 2015 the mostÂ innovative year for the telecom.
For example, Airtel introduced its tap and go (Kozaho) card that would allow their subscribers to transact using their Airtel money on a smart card with Tigo in the seconds half 2015 coming up with Savings account its Tigo cash.
Yet the rushing of telecoms toÂ partner with banks to harmonize both the mobile money platform withÂ banksâ€™ electronic banking markedÂ 2015 as the most competitive year of the sector after AirtelÂ removedÂ transaction fees on its Airtel Money platform with the rest slicingÂ theÂ charges.
In the year 2015, the sector also saw the implementation of the one area network under the NorthernÂ Corridor project of Rwanda Kenya, Uganda and South Sudan. The implementation saw telecoms slash call rates in the region.
Accordingly, MTN slashed its calls to Kenya to Rwf60 per minute fromÂ Rwf120, Tigo slashed to Rwf68 from Rwf165, whileÂ AirtelÂ reduced to Rwf59Â from 120 for Kenya whileÂ for UgandaÂ MTN cut to Rwf60 from 165, Tigo to Rwf20 from Rwf165 and Airtel to Rwf59 from Rwf120 per minute.
Despite this, the sector recordedÂ the lowest new subscribers comparedÂ to the previous year 2014 withÂ 779,006 subscribers added between January and October, 2015 while compared to 840,625 subscribers who were added between JanuaryÂ and October ,2014.
In terms of addition of new subscribers, Airtel wooed more subscribers adding 329,839 subscribersÂ between January to October 2015, Tigo became second attracting 237,163 in January â€“October 2015 MTN Rwanda attracted lowest 214,075 additional subscribers in January-October 2015.
The higher attraction by Airtel was due to their increased corporate social responsibility such asÂ supporting the construction of the Widows of the 1994 genocide, rising star campaign while Tigo launched a savings account on its Tigo cash platform.
Nevertheless, MTN still leads the market in terms of subscriber baseÂ with 4,054,163 subscribers BetweenÂ January to October 2015 while Tigo hadÂ 3 million and Airtel with 1,527,449 subscribers.
Nevertheless, MTN lost a percentage point in its market share to Airtel in June 2015 to settle at 49 from 50 percent in 2014 while Airtel moved from 15 percent to16 percent in June, 2015 Tigo remained constantÂ with 35 percent.
The year 2015 also saw Bharti Airtel sell of its 200 towers in February to IHS as one of cost reduction while Crystal Ventures launched Initial public Offer-IPO of MTN Rwanda stake in June, 2015 and Tigo launching the first ever 4G mobileÂ internet in October 2015.
On the other hand, the year saw the sector pump in millions of francs in the corporate social responsibility with Airtel taking a lead followed by Tigo.
But the year ended with uncertainties for the sector as AirtelÂ and Tigo laying off staff to minimize costs between November and December, 2015 which experts say is as a result of over stretched spending against declining revenues from the operators.