Millicom will hold 87.5% of the quity in a newly created joint venture company in partnership with Marathon Corporation, an established local company with numerous business interests in Rwanda. The joint venture will pay US$60m for the 15 year licence.
Rwanda has some 10 milion inhabitants and is a country of some 26,000m2, located between Millicom's existing operations in DRC and Tanzania, giving potential to create synergies between the three businesses over time. Mobile penetration in Rwanda is low, at some 9% and there are currently only two operators: Rwandatel and MTN, of which MTN is the dominant operator with around one million subscribers. The structure of the mobile industry presents Millicom with the opportunity to build a business with a significant market share.
Rwanda has a well-deveoped road and grid infrastructure and a government with ambitions to continue investments, including in ICT, with the development of telecoms, internet and broadband services in the coming years. Millicom's licence win contributes to this development program. The country's population is very young and the economy is based on agriculture, trade and mining. In addition gas extraction has recently started in Lake Kivu.
Marc Beuls, president and CEO of Millicom comented, "We are very pleased to have been awarded the third mobile licence in Rwanda. It is a country with great potential for mobile telephony as it is a very densely populated country with an extremely low mobile penetration which will enable us to build out a network quickly and economically, and its strategic position between our operations in Tanzania and DRC offers potential operational synergies. Rwanda will become Millicom's eighth country in Africa and will strengthen our overall position in the continent which, we believe will be the fastest growing part of Millicom's business in the coming years."
