Business
Low ARPU hurting Rwandan telecom firms
A Tigo Rwanda telecommunication tower is seen next to an MTN banner in
KIgali. Low Average Revenue per User (ARPU) in Rwanda's telecom
industry is negatively affecting the ultimate profits for operators
compared with other countries in the region. Photo/Cyril Ndegeya
telecommunication tower
By ALEX NGARAMBE Rwanda Today
Posted Friday, May 30 2014 at 19:27
In Summary
Rwanda ARPU of $2 per month was the lowest in the region as Kenya
leads with $6.2 followed by Tanzania and Ugandan at $4.4 and $3.5
respectively. Telecoms are also suffering low business because there
is lower usage of their services by some customers.
The low Average Revenue per User (ARPU) in Rwanda's telecom industry
is negatively affecting the ultimate profits for operators compared
with other countries in the region.
According to ARPU data released last year, Rwanda's $2 per month was
the lowest in the region as Kenya leads with $6.2 followed by Tanzania
and Ugandan at $4.4 and $3.5 respectively.
The low ARPU means that majority of mobile phone users in Rwanda are
low-end subscribers, whose tendency to spend on mobile value added
solutions is low; thereby depressing the effective rate of revenue
realisation per minute for the operators.
With the low propensity to consume the products on the telecom,
operators are finding it difficult to make returns on investments.
Rwanda unlike other countries in the region whose markets have
multiple telecom players, is served by only three operators.
According to the operators, telecom revenue is mostly driven by
pricing and quantity of products offered on the market and Rwanda has
some of the lowest prices in the world.
Telecoms are also suffering low business because there is lower usage
of their services by some customers.
"From an investment perspective, it is always hard to get returns with
low pricing but we are offering low prices because we believe that
will grow our business over long term basis. We can see potential in
future and all these aspects are put into consideration when making
these strategic decisions," said Tongai Maramba, chief executive of
Tigo Rwanda.
However, with the low prices for the products on the market, consumers
are expected to buy in bulk with operators gaining from huge volumes
consumed, which is not the case in Rwanda.
With a high ARPU in regional countries it means that Kenyan, Tanzanian
and Ugandan telecom markets are more profitable than the Rwandan
market.
According to a Deloitte study carried out last year, Kenya's ARPU was
expected to rise to $6.5 this year, $3.7 for Uganda while Tanzania's
was expected to remain unchanged at $4.4. The study did not capture
Rwanda.
"The economy of the country relates to the ARPU in terms of the
disposable income of an individual and although the average GDP per
capita is almost the same across the region, however, the cost of
living is higher in Rwanda," added Mr Tongai.
The cost of living is higher in Rwanda partly because the country is
landlocked, which makes the cost of operations high.
Telecoms have been launching new products to improve revenue generation.
Mr Tongai said the more services the industry shall offer to the
clients, the more revenues and operators need to introduce products
that are relevant to customers.
http://www.google.ca/gwt/x?gl=CA&hl=en-CA&u=http://www.africapressreview.com/link-a%3Fid_syndic_article%3D210931&source=s&q=Low+ARPU+hurting+Rwandan+telecom+firms&sa=X&ei=THGKU8niIMqxsQTVqID4Bg&ved=0CBwQFjAA
Le coup de grâce de l'effondrement du business des telecom au Rwanda
est la cyber-surveillance et l'écoute électronique qui sont
sanctionnées par les lois locales. Je comprends pourquoi nous recevons
très peu de postings, photos et vidéos sur les fora en provenance du
Rwanda. A part évidemment ceux qui font l'éloge du régime, car ils
sont pré-autorisés et pré-payés!
--
SIBOMANA Jean Bosco
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Posted by: Jean Bosco Sibomana <sibomanaxyz999@gmail.com>
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