South Korea's largest telecom service provider, Korea Telecom, has entered the African telecom market through Rwanda, expected to be a stepping stone for further investments on the continent for the company.
The company has entered into a joint venture agreement with the Rwandan government to deploy an LTE broadband network across the country. The network is expected to cover 95 percent of the country's population in the next three years.
Rwanda is the first country in Africa to have entered into a joint venture with Korea Telecom to roll out 4G LTE infrastructure, but many more countries are expected to do so in order to improve their broadband services.
The high-speed wireless broadband technology has come at a time when the Rwanda government has just laid more than 3,000 km of fiber optic cables across the country to boost access to broadband services, including e-governance, e-banking and e-learning initiatives.
As a principal shareholder, Korean Telecom plans to invest $140 million in the venture while the Rwandan government's equity investment includes national optic-fibre network assets, spectrum and a wholesale license.
According to Korea Telecom, the wholesale network service for mobile broadband will help to promote healthy competition for advanced retail services.
Korea Telecom will soon capture many more markets to consolidate its position in the region, according to one analyst.
"Rwanda has definitely just been used by Korea Telecom as catapult for further investment in the region and we are likely to see a sharp reduction in the cost of broadband services because of the resulting competition," said Amos Kalunga, a telecom analyst at Computer Society of Zambia.
The country's mobile phone operators have also been invited to invest in the joint venture. The operators together with ISPs are in turn expected to provide retail access to the broadband services for 12 million users.