Korean company to build Rwanda 4G network

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A year after the South African government rejected a plan to sell 20% of Telkom to KT Corp, the Korean firm is making a big investment splash elsewhere on the continent.

A year after having its offer to buy 20% of Telkom spurned by the South African government, Korea’s KT Corp has agreed to pour US$140m into building a national fourth-generation (4G) mobile network in Rwanda that will serve 95% of that country’s population.

The Rwandan government and KT Corp on Monday signed a shareholders’ agreement to establish a joint venture company to deploy the high-speed 4G/LTE broadband network over the next three years.

“As principal shareholders, KT will bring expertise and make a staged cash injection of around $140m, while the government’s equity investment in the joint venture includes assignment of its extensive (over 3 000km) national fibre-optic network assets, spectrum and a wholesale-only operator licence,” the parties said in a statement.

They intend sourcing debt and vendor financing to complement their equity contributions.

“Rwanda’s current mobile network operators are invited to invest in the project, and it is expected that these companies and other Internet service providers will provide retail access to 4G/LTE wireless broadband services for 12m end users (at full maturity of the market).”

The joint venture has an initial term of 25 years.

Rwandan youth and technology minister Philbert Nsengimana said the agreement with KT Corp marks a “major milestone in Rwanda’s drive to become a modern, knowledge-based economy — and by expanding our information infrastructure, we will create jobs, support social progress and propel economic growth”.

KT and Rwanda will also seek opportunities to extend the business model of the joint venture to neighbouring countries, the parties said.

Deployment of the network is expected to start later this year after further detailed planning.

KT Corp’s investment in Rwanda follows last year’s decision by the South African cabinet not to support a deal to sell 20% of Telkom’s equity to the Korean company. This was despite Telkom and KT being introduced to each other by a former communications minister, Roy Padayachie.

Cabinet’s failure to support the KT deal led to the decision last year by former Telkom CEONombulelo Moholi to tender her resignation.  — (c) 2013 NewsCentral Media

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