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Airtel to invest US$100m in new Rwanda operation

Expension exected to help reduce telecom prices for users.

Airtel has pledged to invest US$100 million in its newly awarded GSM and 3G license in Rwanda in the next three years.

India's Bharti acquired Airtel in 2010 from the Zain group for $10.7 billion, and last week was awarded a $30 million license in the Rwandan capital, Kigali, on the sidelines of a Broadband Commission for Development conference.

The license that Airtel has taken over was until April this year a property of Rwandatel, which was controlled by the LAPGreen Networks, a telecom investment vehicle for the Libya Africa Investment Portfolio.

The Rwandatel license was revoked by government in April after Rwandatel failed to comply with license obligations.

The firm, which was 80 percent owned by Muammar Gaddafi's Libya government, was also ordered to sell its assets after a Kigali court ruled recently that the firm's revenue was too thin to pay off its creditors.

Rwandatel is under liquidation and unconfirmed reports say that Airtel would be asked to take over its assets, currently valued at $50 million.

Rwandatel had invested heavily in internet infrastructure and it remains the leading ISP in the country.

The Rwandan Government did not advertise or competitively appraise bidders for the license but instead appointed a technical team, which conducted the deal that ended up identifying Airtel.

Airtel, before it became Zain, in the past missed out on an opportunity to set up shop in Rwanda. When Rwanda called for a third mobile license in 2008, Zain put in a bid but was among other players that were beaten by Millicom International. Millicom today is one of two mobile operators in the small East African nation, under the Tigo brand.

Airtel will now join MTN and Tigo, which have dominated the market since April this year when Rwandatel lost its mobile license.

Airtel, which already has a presence in Rwanda's neighbors -- Uganda, Tanzania, Kenya and the Democratic Republic of Congo -- is expected to heat up competition in the small country of 11 million people.

It is expected to lower the already falling call rates in a country where slightly over half of its population is poor and solely depends on subsistence agriculture.

Statistics from Rwanda Utilities Regulatory Agency (RURA), the telecommunications industry regulator indicate that mobile users have now reached 3.9 million, pushing mobile penetration to 38.4 percent.

With this license, Airtel's African footprint will expand to 17 operations across the continent.

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