Sales agents for the major telecom operators in Rwanda are creaking
under the burden of exclusivity agreements that bar them from selling
competing products. ILLUSTRATION | JOHN NYAGAH |
NATION MEDIA GROUP
By Johnson Kanamugire
In Summary
- While most agents would wish to sign up with as many operators as possible to maximise revenue, telecoms like Tigo and Airtel forbid their agents from providing services for competitors in the same location. Those who dare, pay a high price.
- Fierce competition by telcos has been blamed for the anti-competitive practices imposed on agents, with mobile money transfer services appearing to be the most contested segment.
- Tigo Rwanda, one of the telecoms fingered in the matter however said exclusivity was voluntary and only those agents who chose to sign exclusivity contracts are compelled to sell Tigo services only since they get a number of incentives.
Sales agents for the major telecom operators in Rwanda are
creaking under the burden of exclusivity agreements that bar them from
selling competing products.
Rwanda Today found out that in most cases, retailers
were barred from dealing in similar products from competitors while
others were forced to accept exclusivity agreements prior to entering
the business.
While most agents would wish to sign up with as many operators
as possible to maximise revenue, telecoms like Tigo and Airtel forbid
their agents from providing services for competitors in the same
location. Those who dare, pay a high price.
“We have supervisors who monitor everything we do. If one is
caught selling a competitor’s product he is suspended and his SIM card
is barred from the service,” a Tigo seller who recently fell afoul of
the rules said.
MTN, Tigo, and Airtel are the major telecom providers in
Rwanda’s market. Latest figures indicate MTN controls the biggest market
share with over three million subscribers, leaving Tigo and Airtel with
over two million and one million subscribers correspondingly.
The fierce competition has been blamed for the anti-competitive
practices imposed on agents, with mobile money transfer services
appearing to be the most contested segment. Sector regulator, the Rwanda
Utilities Regulatory Agency (Rura) says it is not aware of the
practice.
“I am just learning about this now, so I cannot give you our
position at this point in time,” said Beata Mukangabo, the head of
corporate affairs at Rura.
Requiring a supplier not to deal with a competitor is one of the
practices prohibited under article 11 (3) of the Rwanda’s competition
and consumer protection act.
Article 7 (1) prohibits agreements, whether written, non-written
or any other form of agreement designed to fix prices, hinder or
prevent the sale, supply or purchase of goods or services between
persons, or restrict the terms and conditions of sale or supply or
purchase between persons engaged in the sale of purchased goods or
services.
Sources on the ground said that most agents choose to secretly
provide services of competitors, hence risking sanction. Tigo Rwanda,
one of the telecoms fingered in the matter however said exclusivity was
voluntary and only those agents who chose to sign exclusivity contracts
are compelled to sell Tigo services only since they get a number of
incentives like bonus commissions, specialised sales training, transport
to and from work, among others.
“Out of close to 28,000 agents selling our services and products
across the country, only 2,057 have chosen to sign exclusive contracts
with us to sell Tigo services. The 26,743 who are not under contract can
sell whatever they choose, whether it is sugar, salt or our
competitors’ products,” said Sunny Ntayombya, Tigo Rwanda’s Corporate
Communications and Government Relations Manager.
“What you will find however is that these direct sales agents
will earn more money working exclusively with us than they would earn
selling other products,” Mr Ntayombya added
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