Rwanda’s 4G wholesale model seemed like a good idea when it was first conceived. But it hasn’t been working, and should be scrapped.
In 2013, the Government of Rwanda (GoR) set up a joint venture, Olleh Rwanda Networks with South Korea’s KT Corp, to roll out a 4G network that would cover 95% of the country. KT Corp pledged to invest $140m in the project; for its equity stake, the GoR contributed its (then-)newly built country-wide fibre infrastructure, 4G spectrum and a wholesale-only operator licence. The new venture was allocated spectrum in the 800MHz and 1800MHz bands, and critically, a 25-year exclusivity to operate a 4G network.
On the surface, 4G service rollout in African markets appears to be going well. Around 115 LTE networks are commercial or expected to launch in the continent before the end of 2018. On average, since 2015, around 20 new 4G networks launch in Africa every year. Operators are reporting double-digit traffic growth numbers. The African 4G base has been doubling every year, though from a small base.
We estimate the number of 4G connections on the continent at around 50m in 2017, a number which, on current trajectory, should rise to around 90m in 2018. Subject to a variety of assumptions, the number of 4G connections should quadruple to reach close to 350m within the next five years.