What began as a brilliant brand marketing pitch by local telecom giant MTN, is going to turn into a huge cash cow for phone maker Mara Phones.
Last week on Friday as the country was concluding the annual national dialogue Umushyikirano, MTN Rwanda CEO Mitwa Kaemba Ng’ambi released a video in which she was announcing a challenge to connect Rwanda. It had the hashtag #ConnectRwanda. In the Twitter post, Ng’ambi pledged that MTN would give out 1,000 free smartphones and another 100 from her own pocket.
She tagged President Paul Kagame, ICT and Innovation Minister Paula Ingabire and BPR Atlas Mara’s Chief Executive Officer Maurice Toroitich.
A few hours later President Kagame responded with his own pledge to offer free Mara Phones, a recently launched made in Rwanda brand. Kagame promised 1,500 Mara Phones.
Whether the MTN CEO and President Kagame had prior knowledge of this challenge, is something we may never know. What we now know however is that it has opened floodgates of cash for Rwanda’s, and actually Africa’s first phone brand.
Mara Phones, launched in early October, is incidentally a sister company of BPR Atlas Mara bank – all belonging to youthful billionaire Jagdish Thakkar, who also has various other global investments.
Since Friday, the biggest pledge has so far come from the Health Ministry that will buy nearly 60,000 Mara Phones for community health workers. Other government agencies, private firms and ordinary individual Rwandans have been pledging.
As by press time, it was difficult to determine which brand of Mara Phones people or institutions will provide. Mara Phones factory is producing two phone models, Mara X and Mara Z. Mara Z costs Rwf175,750 while Mara X costs Rwf120,250.
Both models have been described as affordable, with a long lasting battery, immense storage space and a 2-year Android version update – through a partnership with Google and its Android One Program.
For starters, according to November 2019 update by the Rwanda Utilities Regulatory Authority (RURA), 9,527,829 Rwandans own phones. However, only about 1.8m are state-of-the-art smartphones.
Minister Ingabire has said the connect Rwanda challenge should connect all its 2.88m households to allow them easily access government services without having to to through or be assisted by a third party.
For example, ordinary Rwandans need services that are on the Government’s IREMBO system. To get them, there are thousands of agents employed to do such tasks, considered basic.
Minister Ingabire said government will follow up with a nationwide training program so that ordinary people can browse the net on their new Maraphones on their own. More infrastructure is going to be put up to support the sudden huge demand for internet, said Ingabire.
Analysts have welcomed the connect Rwanda challenge as “brilliant”, “visionary” idea that is “tackling two problems with a single solution” on the part of President Kagame.
First, Kagame will deal with a problem Mara Phones has been facing since it opened shop; it is said to have been already struggling to sell its phones, amid fierce competition from many brands on the market. Chinese ones sell at same rates or less, and have proven record.
Marketing Mara Phones was going to be a mountainous task, to say the least.
The other problem Kagame has solved in an instant, is that of raising the country’s broadband accessibility. By the end of next two years, for example, there will be millions of Rwandans consuming daily bandwidth. This is a dream Kagame has been pushing for all these years.
And from all this, it is hard to see how anyone or any institution is going to buy a Chinese, American or South Korean phone for this challenge. It is very obvious all handsets will be Mara Phones.
The numbers mean over the coming months, to a year or two, Mara Phones may be the one whose smartphones are bought by up to half of the 2.88m households (which is 1,440,000 Mara Phones). This is a conservative estimate we are using, but it could go much higher.
Lets assume the Mara X model which costs Rwf120,000 will be the one distributed.
Mara Phones stands to earn at least Rwf 172.8billion ($185.8m) from this challenge, if all factors are kept constant.
Mara Phones Managing Director Eddy Sebera, at the launch of the Kigali manufacturing line announced that the company had invested $50m or 46.5billion in the production platform.
Once the plant is fully operational it is expected to produce at least 1.5 million smartphones per year, according to Sebera.
He said at the time that orders for the phones are coming in even beyond the continent. The phone manufacturer said it would open 8 distribution points across the country.
The numbers clearly indicate a rare business opportunity for Mara Phones to shine through any turbulent times.
Meanwhile, MTN Rwanda CEO Ng’ambi announced Tuesday at a press conference alongside Minister Ingabire that her firm will provide SIM cards loaded with 1GB data every months for next three months.
It is not only Mara Phones and MTN Rwanda that are bracing for big money, and government preparing for more work, small tech startups are rejoining.
Shikama Dioscore, who founded GO, an App providing agricultural extension services, is smiling from ear to ear at the new opportunities coming his way.
He wrote: “We, @Go_Ltd and our partners, we are working to distribute 200 smartphones to agronomists who support the smallholder farmers with whom we work across 12 districts. They’ll use the phones to provide personalised E-extension Services #ConnectRwanda challenge…”
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