KT Corp, the South Korean mobile operator, has signed an agreement with the Rwandese government to establish a 4G joint venture in the African country.
The JV, in which KT will have a majority stake, is aimed at deploying a high-speed broadband network…
KT Corp, the South Korean mobile operator, has signed an agreement with the Rwandese government to establish a 4G joint venture in the African country.
The JV, in which KT will have a majority stake, is aimed at deploying a high-speed broadband network to cover 95% of the population in three years.
KT said it will bring expertise and a US$140m cash injection to the JV, while Rwanda’s government will contribute its national fibre optic network assets, spectrum, and a wholesale-only operator licence, according to a joint statement.
Debt and vendor financing will also be used on top of these equity contributions, the telco and the government said.
Deployment of the JV, which will be established for an initial 25 years, is planned to start later this year. Rwandese mobile operators – MTN, Tigo and Bharti Airtel – will be able to invest in the project in order to provide 4G services to approximately 12 million end-users.
Patrick Nyirishema, head of the ICT Department at the Rwanda Development Board (RDB), told TelecomFinance in mid-March that the government hopes that the wholesale network “will remove the barrier preventing retailers entering the market, as they won’t have to invest capital creating their own infrastructure”.
He added: “We want to encourage competition by providing shared infrastructure, which we think will lead to better and lower cost services.”
According to the joint statement citing recent reports by the International Telecommunications Union (ITU), 95% of broadband penetration is expected to translate into a 10% to 13% boost in GDP growth for Rwanda.
KT and the government said that they “will also seek opportunities to extend the business model of this JV to neighbouring countries.”
In the past years the South Korean telco has examined various opportunities on the African continent as it seeks to boost revenues outside its saturated home market.
In late April, KT had shown interest in Mauritius-based ISP iWayAfrica, which is owned by South Africa’s Telkom.
In June last year, it failed to acquire a 20% stake in Telkom after the South African government blocked the deal.
A few months later, it was outbid by Vietnam’s Viettel in its attempt to acquire Cameroon’s third mobile licence.
And a few weeks ago, the South Korean telco dropped plans to bid for a 53% stake in Vivendi’s Maroc Telecom because of valuations differences.
