The government will have no other option but to compensate Korea Telecoms (Ktrn) after it cancelled the company’s contract as the exclusive wholesale provider of 4G Internet in the country for 25 years.
In the joint venture signed in 2013, the government of Rwanda owned 49 percent while Korean Telecom owned 51 percent in a deal where Korea Telecoms would use the country’s national fiber optic cable and get a wholesale-only operator license.
Just after the decision to cancel the contract had been taken in December last year, Minister for Information communications Technology and Innovation, Paula Ingabire confirmed the cancellation and told Rwanda Today that government was negotiating the terms of the agreement cancellation with Korea Telecom.
She said cancelling the existing 4G wholesale monopoly by Korea Telecom is one of the developments that came with the new broadband policy and strategy.
“We are currently in negotiations with them to iron out the terms of the cancellation, Ktrn can continue selling but not exclusively,” she said.
Although it was not possible to get a comment from the Minister by press time regarding the way forward after the negotiations, sources close to the deal said government has agreed to compensate Ktrn for at least 10 years that they still have on contract.
It is however not yet clear how much government will compensate the Korean telecom company. The government is already open to issuing 4G wholesale licenses to interested mobile network operators (MNOs).
The CEO of KTRN in Rwanda declined to comment on the ongoing negotiations moment. Korea Telecom (KT Corp) was expected to inject around $140 million into the joint venture to facilitate the roll out of a fast 4G LTE broadband network to 95 percent of Rwandans, which it dully did in the years it operated.
The cancellation of the monopoly is part of a new broadband policy and strategy intended to drive 4G penetration and adoption, as the country pushes for the phasing out of 2G and lays ground for 5G.
Internet Industry analysts say the government has been pushing MNOs to offload 2G for some time now in a bid to have them strengthen their Internet technologies.