The first company on Africa’s mainland to offer a 3G network and the first telecom in Rwanda to implement 4G on mobile, Tigo Rwanda was also the first company to introduce cross-border mobile money transactions, with Tanzania, and is also pushing to set up not only Smart Cities, but also Smart Villages with affordable Wi-Fi coverage in rural areas. CEO Philip Amoateng discusses the leaps and bounds being made in making Rwanda an ICT leader in the region.
The government just signed an MoU with a Chinese company that is part of the strategy to create an information superhighway in East Africa. How would you assess the tangible efforts made by the Government of Rwanda to become the ICT hub of the region?
Rwanda is strategic and forward thinking. It is a matter of looking where strategic opportunities are, and how they can be taken advantage of. That is exactly what Rwanda is doing, thanks to its government. Fiber-optic infrastructure was built by the government. We, as providers, only have to utilize these already existing resources to take advantage of the potential of high-speed internet.
In terms of regulations, Rwanda is also efficient and extremely transparent. By coming as an investor into the country, one should not worry about the ICT aspect. Education here is also good, and ICT is also developed through it.
How feasible do you see this ambition and what is the role Tigo Rwanda has in it?
Within Africa’s mainland, we were the first company to offer a 3G network, and we also were the first telecom in Rwanda to implement 4G on mobile. We also were the first company to put into place cross-border mobile money transactions with Tanzania, a country from which the majority of Rwanda’s import traffic comes from. We saw the need for cash movement between these countries. We have consistently positioned ourselves in the same light.
Thanks to our company steering towards the agriculture sector through, for example, the Tigo Payment Solution for Agriculture, tea farmers in two districts are now paid their salaries in 48 hours, compared to the 20 days previous. Farmers can now receive their money in the comfort of their home, without having to physically go to banks for instance.
Plenty of services can now be paid through mobile financial solutions. In the long run, we want people to stop using physical money, as this costs a lot to the government and is not as transparent as other digital solutions. We want to achieve a cashless society. Today, more than a million people per day are doing transactions thanks to our solutions. We want to facilitate both the government’s and our customers’ vision.
Tigo Rwanda is a committed company giving back to society through a comprehensive CSR program. What is the responsibility companies such as yours have regarding the communities in which they work, and where is your CSR program headed?
For example, we recently partnered with various organizations and the government to create a Smart Village in Ruhunda, Rwamagana District, by providing affordable Wi-Fi for the entire village. Today people are now connected to the world in the most remote places. We also partnered with the government in order to make it possible for inhabitants to pay their taxes through mobile devices. These are a few examples that help us to understand our social impact on the people of Rwanda. The vast majority of Rwanda’s population lives outside big cities, mainly in villages. That is why we wish to develop not only the concept of Smart Cities but also the one of Smart Villages. We want to develop projects that have a true positive impact on the population. That is what ‘smart’ things should be all about. In this regard our collaboration with the government is crucial.
Through the Tigo Digital Changemakers program that we run in collaboration with Reach for Change, talented young people have the opportunity to change the lives of their compatriots by using tools from the digital world. We avail close to $30,000 to this program every year. Our CSR model is not to assist people with money, but to change the world.
4G implementation in Rwanda is unique. The government entered a joint venture with Korea Telecom, with the aim of achieving 95% 4G population coverage by 2017. What is the point of view from an operator working under such a model?
Tigo believes that this approach might actually be the best one. 4G is the latest technology, and yet not many people can afford the necessary handsets to use it to its full potential. From an operator side, building the 4G backbone ourselves wouldn’t be a profitable model as not many customers would use it; therefore, in terms of return on investment, a longer period would be necessary to achieve an economic balance.
How would you describe the competition in Rwanda’s mobile sector?
It definitely is a healthy competition: competition increases innovation in the field of services. Every day we are looking at smarter ways to compete. This benefits the customers in the end. The more we are able to do this, the more money will we get. It is a win-win situation.
Within its seven years of existence in Rwanda, Tigo managed to obtain a 35% market share. What are your plans to increase it in the near future?
The future is bright. We know we are in the right place. The government promotes ICT, a sector in which we are a key player. We will continue to invest in this market to improve our network. Thanks to our network quality people trust us, and we continue to expand into rural areas where we have limited to no coverage. We are also developing mobile financial services, through partnerships, and we are enlarging in areas that are not part of our core business such as banking.
How are you taking advantage of the synergies with Millicom?
That is the beauty of being part of a large family. Market-wise we are on our own, but then we are able to leverage on several aspects, especially on technological know-how transformation. Some of our Ghanaian colleagues come here to learn about things that we did here to apply in their country of origin. Procurement-wise we have highly skilled people in London, for instance, who negotiate deals on our behalf to keep costs low. We are fully taking advantage of what Millicom can offer us.
You have been Tigo’s CFO in Rwanda and Ghana, and recently appointed Rwanda’s CEO. How will your past as CFO help you with the new challenges ahead?
I have been CFO for the past 10 years in different markets, with different CEOs. I have been crafted out of a lot of good people. I understand numbers, but I also have commercial skills that were passed on to me through different managers. Now I must apply all that I have been taught. Therefore, it is now easy for me to tell which decisions make sense on both a financial and commercial level. I think I am qualified enough to take that company to the next level. Numbers speak for themselves: we have strong market shares, profitability has been wonderful; I think I am here at the right time.
As Africa is growing as an investment destination, what do you think is driving this attention towards the continent?
It is important to understand that investors want to go where market truly is. The African market is growing extremely fast compared to the rest of the world. The population growth rate is on average growing by 3% in comparison to some European markets that are actually shrinking. Therefore, the African market size is going to grow significantly in the years ahead.
As if this was not enough, the economic context is also of great importance. Rwanda’s economy, for instance, doubled in the past 10 years, which is the case with the African market generally speaking. We are seeing average growth rates of 5% per year. Even during the global slowdown, Africa still continued to grow. Everything is growing on this continent: literacy, education and infrastructure, and this will in turn naturally attract international investors.
Africa is also blessed with countless natural resources. Our neighbors in the Democratic Republic of Congo for instance are well known for their timber resources, gold, and various minerals.
This continent, I believe, is the world’s future.
Regional integration is one of Africa’s priorities, as the largest untapped market and its biggest opportunity for progress are right on its doorstep. What role is ICT having in it?
One only needs to look at the European Union to see what integration can do. The free movement of labor, skills and capital is possible in the EU because of integration and the opening of borders.
Africa, a much bigger continent in comparison, has a multitude of minor blocs dealing with one another, but these still are marginal. West Africa has the Economic Community of West African States (ECOWAS), East and Southern Africa has the Common Market for East and Southern Africa (COMESA), and East Africa has the East Africa Community (EAC).
The issue is that this situation doesn’t translate into a bigger agenda, and the continent is for the first time realizing this. In the last African Union Summit held here in Kigali, presidents agreed to have one single African passport. Free movement of people and goods is now wanted. Thus, a company establishing itself in Rwanda, for instance, will not only have Rwanda at its disposal but also the entire continent once a strong union is put into place.
To be able to achieve such a goal, a strong ICT sector is definitely needed. Communication is key. Four East African nations, for instance, stopped charging roaming fees. Today, when you receive a call on your Rwandan telephone line in Uganda you are not charged for receiving a call. Before the East African One Area Network was instituted, people had to buy new sim cards whenever they traveled into a new country in order to avoid roaming fees. ICT truly fosters communication, makes it easier to apply common rules, and brings investments into the continent.
How would you like to see Rwanda by 2030?
By 2030, Rwanda will not use physical cash for transactions anymore. The country will have a 100% literacy rate, and the entire population will be able to use technological assets and ICT equipment generally speaking. This is the case today in advanced countries. High quality education will also be brought to people through technologies. This will guarantee to everyone that, whatever the financial situation they are in, they will be able to acquire knowledge for almost anything. This is an achievable objective.