East African Business Week

KIGALI, RWANDA - More than a half of Rwandans will not have gained access on mobile communications services next year as the country had initially targeted.
The Rwanda Utilities Regulatory Agency (RURA), the telecoms regulator had set a target of accelerating the number of Rwandans with a mobile phone to six million by 2012 representing a mobile penetration of 60%.
RURA statistics indicate that between December 2010 and January 2011, mobile market grew by 2.1% or additional 77,654 new users.
The combined active mobile subscribers of the existing three national operators -MTN, Tigo and Rwandatel- stood at 3.6 million in January from 3.5 million a month before.
This number was calculated based on 10 million people in the country suggesting that mobile penetration was around 36%.
If the market continues to grow by 2.1% or 77,654 new users every month, mobile users could hit 4,480,609, which is pretty below the six million mark.
The slow growth could be explained by the exiting high call tariffs from one network to another because of prevailing high cost of interconnection.
It could also be linked to low network coverage, which limits some parts of the country from accessing mobile services.
There is also a huge gap between the market leader MTN Rwanda that has 2.5 million users or 71.3% of the market share and rivals Tigo and Rwandatel, which occupy the remaining market.
This makes MTN feel superior and imposes high tariffs on its services making it ridiculously expensive for the minority network users to communicate with MTN network users.
Such situation scares would be mobile users- majority of them being low-income earners- from using mobile services thus limiting mobile penetration.
Although RURA has commissioned a study whose results will determine whether the current interconnection fee of Rwf40 per off-net call should stay or go down, there is no hope that the mobile market will continue to grow at an impressive rate.
One of the features was expected to increase mobile penetration was to allow users to switch users and retain their original numbers.
However, this service known as Mobile Number Portability (MNP) has been postponed until the market grows bigger sometime next year. MNP was expected to raise service level and lower tariffs.
Another factor that is expected to hurt mobile market is the rising inflation arising from the soaring oil prices because of unrest in oil producing Libya and Middle East.
Inflation reached 2.6% last month and is expected to hit 3% this month, according to the central bank of Rwanda.
If the trend continues like this, inflation is expected to surpass 6% initially targeted by the end of this year.  
Because of high oil prices, locally produced goods especially food commodities are expected to hike and this could push people to buy what they need which could hurt mobile growth because communication services can't replace food.
Rwanda is also about to start commemoration of the 1994 Tutsi Genocide, which starts on April 7 and goes on for 100 days.