April 5 (Bloomberg) -- Rwanda’s telecommunications regulator said it revoked Rwandatel SA’s license after the East African country’s third-biggest mobile-phone operator failed to comply with its license obligations.
Rwandatel must halt its services with effect from April 8, Regis Gatarayiha, acting director-general of the agency, told reporters today in Kigali, the capital. Cleophas Kabasiita, a spokeswoman for Rwandatel, couldn’t confirm the revocation when contacted earlier today and wasn’t available when called again later in the day.
“We thought they were not performing and, because of that, the competition was not what was expected,” Gatarayiha said.
Rwandatel competes with MTN Rwanda, a unit of MTN Group Ltd. of South Africa, and Millicom International Cellular SA’s Rwandan unit, Tigo Rwanda. The company had 443,534 subscribers as of August 2010, compared with 2.2 million for MTN and 529,114 for Tigo, according to the regulator.
Libyan African Investment Portfolio, a state-owned company, holds 80 percent of the Rwandatel, while the rest is held by the Social Security Fund of Rwanda. Last week, Rwandan President Paul Kagame said he would comply with United Nations resolutions requiring Libyan assets in the country to be frozen. The UN Security Council imposed the sanctions in an effort to halt attacks by Libyan leader Muammar Qaddafi’s regime on protesters.
The Rwandan government today seized the Libyan-owned Hotel Laico Umubano to comply with the sanctions, Finance Minister John Rwangombwa said in a separate interview. The facility will in future be operated by the Rwandan government, which previously held 40 percent of the business, he said.
“We are removing any Libyan influence, but the assets will operate normally,” Rwangombwa said.
Gatarayiha said the decision to revoke Rwandatel’s license wasn’t related to the UN resolution, as the process of evaluating the company’s performance began on Feb. 4, before an uprising began in Libya. The move was part of an effort by Rwanda to increase the number of mobile-phone users in Rwanda to 60 percent of the population by 2012 from 36 percent now, he said.
“If you have three operators with one that is not competing effectively, it’s not helping the penetration rate,” he said.
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