Leaving MTN with an impressive record

 

By Magnus Mazimpaka

The International Telecommunication Union (ITU) appointed MTN’s Chief Operations Officer for Rwanda, Andrew Rugege, to head its Eastern Region. In five years Rugege has overseen MTN Rwanda grow from just 300,000 to almost 3 million subscribers. Magnus Mazimpaka spoke to him about his time at the company.

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What did you contribute and what has been your experience?

As managers there’s a role that we played, but credit must go to the middle level managers and to the other members of staff. My portfolio was marketing, sales and distribution, customer care and data. I had operator relations, meaning interconnect, meaning roaming, and I also had company security in my portfolio.

During your time, your competitors—Tigo, Rwandatel—complained about denying them interconnectivity. Is that a strategy to compete or was MTN being unfair?

Not at all. We have other ways to compete. We have superior products, customer service, network, so we don’t need to go to compete using that. There are certain principles that govern interconnection. It is calculated and regulated. We have Rwanda Utility Regulatory Agency (RURA) that looks into this. I think what people don’t realize is that interconnection is related to the investment into the network and the recovery of those funds through interconnection. So when people come and say I want to use your network at this price without looking at what investment you’ve made to get to that point, I think that is wrong and selfish.

Before Tigo we had an interconnection regime with Rwandatel and we had a fee of Frw40 per minute. But the regulator said it’s time to review this. They hired a consultant who used the models that exist to calculate what a fair interconnection rate is and they have come up with a regime. They’ve actually reduced it to 35, and by 2015 it will be Frw22.5.

The government is investing into a data company. Should government compete?

MTN is not concerned about competing with anybody. MTN would be concerned if the playing ground was not leveled…I think the government has a strategy and we all know that Rwanda is no ordinary country. I am in no position to question their decisions. My personal feeling is that perhaps the government is making these investments mainly where private sector is not able or willing to make these investments, as long as this objective does not defeat the objective of growing the private sector.

What is the biggest challenge in investing in this industry in Rwanda?

When you have to transport everything overseas and you have to go from Mombasa to Dar es Salaam to here the cost is very high and yet you’ve got to implement a network where minutes are reasonably priced. Shareholders need a reasonable return on investment and yet the country itself needs development at an affordable cost, so there is a very difficult balance. The other challenge is this slow pace of penetration and the barriers to entry. For most people in the deepest parts of Rwanda affording a handset is still a barrier. Lack of electricity to charge their handsets is still a barrier. RDB is doing a good job with the ICT buses that have been going around. That helps us in an elevated level of familiarity with technology.

The other challenge is human resources. It has improved with graduates from Kigali Institute of Technology, and the other institutions, but we still have ways to go. We still need people to have a place where they can have some kind of hands-on experience before entering the market. For a company like MTN, there is only so much we can do in terms of taking people who know nothing because we are there to make money.

[Nevertheless] I think MTN has done a tremendous job. I have had the privilege to visit other networks in Africa and even the U.S and MTN has a network that ranks up there. We are over 93-94 per cent of coverage in Rwanda. There is no network that never has technical problems, but most of the time we have good quality network and we have priced handset in affordable reach, although we are not where we should be.

Your rates in the region are fairly higher than other networks; could this be the reason for those challenges?

I don’t think so. When you look at disposable income in this country compared to other countries, when you look at the cost of that minute compared to other countries, you find that we’re actually well priced…Admittedly we have come down from the satellite prices, but we still are not the same as people that are getting it right from the sea.

You have 94 percent coverage, so you’re not investing anymore?

We would like to cover that remaining part, but we also invest in maintenance and renewal. If you have noticed MTN never stays where it is in terms of technology. If we find, for example, that the radio units that we have on every tower are from five years ago we change them. The only things that are not changing are those steel poles that make up the tower. The more expensive part of it is the core system that sits on those poles.

So that means rates may not go down?

No, it doesn’t mean that at all. I think you realize that even over the last 18 months our tariffs have gone down because as we stabilize our network, as we get more customers, and get the return on investment, we drop our prices.

What was the biggest challenge in your job?

To make sure all assets are geared toward the customer. Those objectives in marketing, network and distribution must serve the customer. That is the job of the Chief Operating Officer.

You are an engineer. You come from a country that is progressing in ICT. Is this the reason you were given the ITU job?

During the interview they did speak about my experience as an engineer, my experience as a businessperson with an MBA combined with computer science. But most importantly is the experience that I have from private sector in a country that they judge to be in the right direction as far as ICTs are concerned.