The Government of Rwanda and KT Corporation - the largest integrated telecommunications service provider in South Korea - today signed a shareholders agreement to establish a Joint Venture (JV) Company to deploy a high-speed (4G LTE) broadband network to cover 95 per cent of the population in three years.
"This agreement marks a major milestone in Rwanda's drive to become a modern, knowledge-based economy," said the Minister for Youth and ICT Jean-Philbert Nsengimana. "By expanding our information infrastructure, we will create jobs, support social progress and propel economic growth."
As principal shareholders, KT will bring expertise and make staged cash injection of around $140 million, while the Government of Rwanda's equity investment in the JV includes assignment of its extensive (over 3,000 km) national fibre optic network assets, spectrum and a wholesale-only operator license. Debt and vendor financing will be sourced, to complement these equity contributions.
Rwanda's current mobile network operators are invited to invest in the project, and it is expected that these companies and other ISPs (Internet Service Providers) will provide retail access to 4G LTE wireless broadband services for 12 million end-users (at full maturity of the market).
"Rwanda's citizens and businesses must have access to the tools that will enable them to seize the opportunities of the digital age - and none is more important than fast, reliable and accessible broadband," said Clare Akamanzi, CEO of Rwanda Development Board, who co-signed on behalf of the Government of Rwanda. "We are pleased to partner with KT in this unique initiative to make available high-speed broadband to all Rwandans."
This rapid deployment of high-speed broadband capability in Rwanda will accelerate development of the country's ICT sector, create jobs, as well as help facilitate social and economic progress.
Yung Kim, President and Group Chief Strategy Officer at KT, said that his company believes that "a nationwide broadband based on 4G LTE technology is the key foundation for Rwanda's ICT development".
"The wholesale network service for mobile broadband will help to promote healthy competition for advanced retail services and solutions, and will benefit consumers, enterprises and the nation," he added. "KT looks forward to actively participating in this great opportunity and is excited to be able to partner the Government of Rwanda to bring this plan to fruition."
Based on recent reports published by the International Telecommunications Union (ITU), 95 per cent broadband penetration will translate into a 10 to 13 per cent boost in GDP growth for Rwanda.
KT and Rwanda will also seek opportunities to extend the business model of this JV to neighbouring countries.
Deployment is expected to commence later this year after further detailed planning.