Barely a year after the relaunch of Rwandatel’s mobile phone network and MTN’s tenth anniversary, Tigo last week added its blue to an already colorful telecommunications landscape.

Tigo is now operational (photo Timothy Kisambira)

Yet despite having to face two well-established competitors, Tigo is confident in its capability to woe customers. “We are here to compete and we have the network to do just that,” Marcelo Aleman, Tigo’s chief commercial officer said.

Aleman’s confident approach is likely to unsettle other networks, all the more so since his company has an equally indifferent attitude towards the big amount of interconnection fees it will have to pay in the first months of its operations. Whenever a person calls from one network to another, the caller’s operator has to pay an interconnection fee to the receiver’s; in the first few months of Rwandatel’s operations, for instance, the company received barely a tenth of the fees, and the rest was pocketed by MTN.

Yet Tigo’s management is undeterred. “We have discussed this with service providers and the regulator. We are confident we and the other networks will be able to meet their commitments on a monthly basis as agreed,” remarked Tigo-Rwanda CEO Alex Kamara, adding that despite the initial losses due to interconnection the company would not overcharge its subscribers.  

Tigo won the battle for the third operator’s license in December 2008, when it out competed Telcel Globe, Larrycom-Expresso and Zain respectively after tabling the best financial offer of some US$ 60 million. The license enables the telecommunications company to operate in Rwanda for fifteen years.

Tigo is a brand of Millicom International Cellular, which specializes in emerging markets where penetration is still low and subscribers look for improved services. Millicom operates in 13 countries across the world, 7 of which are in Africa (Senegal, Ghana, Chad, Democratic Republic of Congo, Tanzania, Mauritius and now Rwanda).

According to CEO Kamara, the company has spent 9 months in preparation for the launch of its services in the country, investing US$ 53 million to lay the foundation for its operations. Tigo has already set up 111 network sites in 13 districts, and it is continuing its roll-out. “We have sites in 19 districts, but so fare we are fully operational in 13 of them,” explained chief technical officer Mohamed Dembele, blaming the slow progress on the topography of the country. Yet he said that they would add 11 more districts next year and cover the entire country by 2011.

This is in line with the requirements issued by the Rwanda Utilities and Regulatory Authority concerning geographical coverage, infrastructure and technology, and which are part of the license.

“We have met our commitments so far, and the ad-hoc committee set up to supervise the progress has expressed satisfaction,” Kamara said.

No promotional rates

With the roll-out of the network, Tigo wants to achieve what Kamara calls a “Triple A” strategy: providing availability, affordability, and accessibility of mobile services. “We are here to emphasize quality as it is one of the major challenges that service providers face here,” Kamara said.

The company enters the market by offering per second billing of Frw 1.5 per second, independent of the network you’re calling. In the evening and during weekends, a Tigo-to-Tigo call will cost Frw 1 per second.

For short messages, the company will charge Frw 25 for local SMS and Frw 50 for regional ones. The company is set to offer the lowest denomination airtime card of Frw 300.

 “Our rates are not promotional,” chief commercial officer Aleman stressed, adding that change of tariffs could be caused by unexpected circumstances.

As for roaming, Tigo has already agreements with its six sister companies in Africa, and it expects to conclude other ones through partnerships with leading networks by December.

Concerning Internet services, Tigo is also offering competitive data rates which stand at Frw 30 per megabyte. Though the company experiences difficulty in putting to ground its own optic fiber, it is in talks with SeaCom, a submarine cable company, to deliver fast internet connection in the country.

So now that blue Tigo is set to conquer its part of the market, it will be interesting to see how yellow MTN and orange Rwandatel will react. They say you should always avoid a clash of colors, but in this case it will be a beautiful sight for consumers to behold – and benefit from.