Tanzania - Telecommunications Tanzania - Telecommunications
Overview
In February 2005, Tanzania initiated liberalization of its telecommunications sector, ending the exclusivity of the government-owned telecommunications monopoly, TTCL. Further policy reforms have led to the telecom sector becoming one of the most liberal in Africa. Licenses to operate various telecommunications services are made available to any investor. The government's effort to privatize TTCL has stalled. TTCL has been given management of the national fiber backbone, and will service all districts; private operators must contract for service with TTCL. In addition, investors report that though the government has authorized some private companies to build terrestrial fiber networks, governing regulations remain unclear and inconsistently applied. Theft of service and intellectual property rights is a major problem for cable content providers. Also, high import tariffs on telecoms equipment and taxes on telephone facilities by various authorities are still placing burden on investors and operators.
On January 29, 2010, the Tanzanian Parliament passed the Electronic and Postal Communication Act. The Act requires telecom firms to list their shares on the Dar Stock Exchange (DSE) by 2013 and makes permanent a 35/65 local to foreign ownership requirement.
Tanzania’s telecommunications sector is one of the country's most competitive. Mobile phone penetration is approaching 70 percent, with an annual subscriber base growth of more than 20 percent. Price wars among the major operators have adversely affected many of the smaller players, which suffer from rapid customer churn. According to the Ministry of Finance and Economic Affairs, the overall mobile subscriber base grew from 20.9 million people in 2010 to 32 million by 2014. Mobile subscribers now outnumber fixed lines in Tanzania by more than 10:1. Tanzania’s communications sector displayed strong growth in 2014, with growing use of mobile-banking.
The market is very competitive with the following operational service providers:
Fixed network operators:
- Tanzania Telecommunications Company Limited
- Zanzibar Telecommunications Limited (ZANTEL)
Mobile network operators:
- Tanzania Telecommunications Company Limited
- Zanzibar Telecommunications Limited (ZANTEL)
- Vodacom Tanzania Limited
- MIC Tanzania Limited (TIGO)
- Airtel Tanzania Limited
- Benson Informatics Limited (Smart)
- Dovetel (T) Limited (SASATEL) Smile
- Viettel
There are eight active mobile-phone operators as of July 2015 and – market share was Zantel 5 percent, Airtel (formerly Zain) 30 percent, TIGO 27 percent, Vodacom 37 percent, Benson 0 percent and TTCL 1 percent - with coverage in almost every part of the country. In addition, 62 operators held ISP and data licenses. The license categories in the converged licensing framework include: network facility, network service and content service.
The Tanzania Communications Regulatory Authority (TCRA), established by the TCRA Act no. 12 of 2003, is an independent authority governing the Postal, Broadcasting and Electronic communications industries in the Tanzania. TCRA regulates Tanzania’s telecommunications industry. For more details visit: www.tcra.go.tz.
Summary of trends in Telecom Statistics
Subscription and Teledensity |
2010 |
2011 |
2012 |
2013 |
2014 |
Fixed |
174,511 |
161,063 |
176,367 |
164,999 |
151,274 |
Mobile |
20,983,853 |
25,666,455 |
27,450,789 |
27,442,823 |
31,862,656 |
Total |
21,158,364 |
25,827,518 |
27,627,156 |
27,607,822 |
32,013,930 |
Penetration |
50% |
59% |
61% |
61% |
67% |
Source: 4 Quarter 2014 Telecoms Statistics - www.tcra.go.tz
Sub-Sector Best Prospects
Tanzania’s telecommunication sector depends on imported equipment, largely from Germany, U.K., China, Malaysia, India, and the U.S. Potential for U.S. exports and investment exists in the following areas:
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Wireless services and equipment;
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Mobile operations;
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Internet service and equipment;
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Voice over Internet Protocol services;
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Broadcasting stations;
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Postal and courier services;
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M-Commerce (On-line payments using mobile wallet, merchant payment, m-finance);
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Cable content.
Opportunities
With less than 10 percent internet penetration, growth is inevitable as consumers demand greater connectivity. Due to the relatively wide prevalence of mobile phones, telecommunications companies are looking at ways to offer internet services via handsets.
Tanzania is highly unbanked with only 17 percent of the population in the mainstream banking system. The increase of mobile financial services subscribers from 7 percent to 44 percent has helped to increase the rate of financial inclusion from 16 percent to 58 percent. As a result the government of Tanzania has now set a new financial inclusion goal of 75 percent to be reached in 2016. E-commerce is constrained by the lack of a legislative framework appropriate for e-business/cybercrime. Tanzania’s legal framework does not yet provide adequate safeguards to create an environment of trust for e-business transactions. Consequently, financial institutions are reluctant to support e-transactions. However, mobile banking is growing fast, as many more Tanzanians use cell phones than use the internet. With smaller average transaction amounts, money laundering safeguards are a lesser concern.
The landing of the first fiber optic international submarine cables in the country in recent years has revolutionized the market which up to that point completely depended on expensive satellite connections. In parallel, the government has switched on the first phase of a fiber backbone network to connect population centers around the country and other landlocked neighboring countries. In March 2015, the government of Tanzania announced the construction of the very first national internet data center (IDC) which will provide high speed broadband connectivity utilizing the fiber optic cables that are in place in Kijitonyama in Dar es Salaam. This will help make Tanzania an important ICT hub in East Africa.
Liberalization has opened up opportunities to establish new telecommunications operations, particularly for mobile phone operators, public data communication operators, closed user group data communication providers, radio paging service providers and Internet service businesses. Opportunities also exist to provide modern technology and support services to the current industry operators. Provision of secure credentialing will be a significant area of opportunity.
Web Resources
Tanzanian Communications Regulatory Authority
Ministry of Communications
Tanzania Commission for Science & Technology