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, requiring companies to host data locally would seem an attractive option to foster local industry and data sovereignty. The question is whether it ultimately does more harm than good.
Last August, an Indian expert panel committee released its initial recommendations for the country’s upcoming privacy law, including a requirement for companies to store Indian user data in servers physically located in the country. The committee’s recommendations have touched off a fierce debate on the future of India’s digital ecosystem. As more African countries push to adapt their legal frameworks to the Internet age, the same debates are intensifying here.
The weight of governments in the African terrestrial fibre business is increasing. African government have committed around $1.7bn to building fibre backbone networks since 2010, according to data from our new terrestrial fibre report. In many markets, the government is the largest holder of terrestrial fibre capacity, a trend that carries significant implications as Africa seeks to enter the 4G and 5G eras. Is this a sustainable solution to reducing Africa’s growing urban/rural broadband divide? It’s complicated.