The Africa continent has always been, touted as having multiple opportunities for the expansion of broadband and digital services. Over 700 million people in Africa are not connected to the internet. Due to the fact that mobile network operators’ fails to invest adequately in telecom infrastructure. This result in exclusion of Africans from accessing basic needs such as education, banking and health care services. With these existing challenges, however, the adoption of the digital lifestyle in Tanzania is rising.
Internet connectivity can improve access to a wider range of information, education, and livelihood opportunities that can boost the citizens well being. As a country, Tanzania has become the leading place for mobile money in the region, overtaking neighbouring Kenya. E-business is growing importance in Tanzania with more than 2 million internet users. At 2019, Tanzania mobile money market reached a transaction value of US$ 57 Billion.
The government of Tanzania has encouraged foreign participation to promote economic growth and social development, and policy reforms have led to the country having one of the most liberal telecom sectors in Africa. Most nations with affordable data have excellent mobile and fixed broadband infrastructure, enabling providers to offer large amounts of data, and bring down price per gigabyte. The landing of the first fibre optic international submarine cables in the Tanzania in recent years has revolutionised the internet connectivity market, which up to that point entirely depended on expensive satellite connections.
According to data released recently by British technology research firm Cable, Tanzania is the country in East Africa where you will pay lowest to access the internet on your smartphone at $0.75 for every gigabyte of data. The report indicated that Tanzania is followed by Rwanda in $1.25, Uganda ($1.56) and Burundi ($2.10) while Kenya, which was second in East Africa last year charging $1.04, now charges $2.25 per gigabyte (GB).
Today, there is no shortfall of fibre optic cable around the coastal areas of Africa to aid fibre networks for the delivery of broadband services, there is not much fibre inland, and terrestrial broadband networks are typically limited to urban areas. As a matter of fact, the vast size of the African land mass and the defining distinction among urban and rural areas can make broadband network rollouts beyond saturated urban areas logistically complicated and costly. Nevertheless, 3G will remain the most dominant network (58%) for the 1.05 billion mobile connections projected in Africa by 2025 disclosed by data from the GSMA Mobile Economy report.
From the launch of mobile broadband services in Tanzania, the mobile network operators have become the leading internet service providers. Operators are hoping for revenue growth in the mobile data services market, given that the voice market is almost entirely prepaid and voice average revenue per user continues to fall. Meanwhile, investment in network upgrades has taken place. A fast-developing source of revenue is from mobile money transfer and m-banking services. In Tanzania, there are internet cafes in all major towns, and Wi-fi hotspots are widespread, except in rural areas. While some savvy social media users manage to bypass the restrictions by using a virtual private network, or VPN, the workaround is illegal in Tanzania.Market competitiveness, investment, merger and acquisitions
In 2019, Airtel switches on LTE in Tanzania uncrossed the 100 million subscriber milestone in July. Same year, Vodacom is the lead mobile service in Tanzania with a 33 percent market share of mobile subscriptions. Tigo and Airtel ranked second and third between the first quarter of 2018 and the fourth quarter of 2019, firmly dividing the market between the three major companies.
In total, Vodacom generated 15.67 million subscriptions by June 2019, whereas Tigo and Airtel generated 12.57 and 12.72 million respectively. The overall number of mobile cellular subscriptions in Tanzania increased from 43.5 million in 2018 to 47.8 million by December 2019. According to the report, mobile network subscriptions in Tanzania reached 51 million at the end of 2020. In 2019, mobile market revenues were estimated at USD 1.1 billion (TZS 2,703 billion), and the sector accounted for 1.9% of Tanzania’s GDP.
A new converged licensing regime introduced in 2006 has brought a large number of new players into the market. Tanzania mobile penetration reached 88% by March 2020. The lenses of connectivity and private sector engagement in Tanzania has developed a fully competitive mobile sector. There are 8 telecommunication operators in Tanzania: the government-owned Tanzania Telecommunication Company Limited (TTCL), the privately-owned company Airtel Tanzania, Smart Telecom, Vietel Tanzania Limited (Halotel), MIC Tanzania Limited (Tigo), Vodacom Tanzania, SMILE, and Zanzibar Telecom Limited (Zantel).
Zantel was acquired from Etisalat in summer 2015 by the parent company of Tigo. A 5th license was given out to Vietnam-backed Viettel which started in October 2015 under the brand name of Halotel. At 2019, Smart Telecom shuts down its mobile operations in Tanzania. Airtel was allocated an additional 2×10MHz spectrum in the 1800MHz band, at an annual cost of USD600, 000 with a total allocation to 2×22. 5MHz in the 1800MHz band in 2020. Vodacom Tanzania invested TZS75 billion (USD32 million) in the expansion of its 3G and 4G networks last year aiming to increase high speed mobile data coverage to 90% of the population by 2025.
Recently, Millicom International Cellular sell the entire unit of its operations in Tanzania and Zanzibar which includes Tigo and Zanzibar Telecommunication (Zantel), to a consortium led by Madagascar-based Axian, a pan-African group that was part of the consortium that acquired Millicom’s operations in Senegal in 2018 and plans to invest USD500 million in Tanzania.
Vodacom Tanzania invested Sh75 billion investments in 2020 in broadband expansion for 3G and 4G technologies across the country. In April 2020, Smile launched a restructuring plan earlier this year, with Al Nahla leading a proposal to inject more than USD50 million cash in the company provided PIC extended the terms of an option to sell its stake.
Moreover, severe import tariffs on telecoms equipment and taxes on telephone facilities by various authorities are still placing a burden on investors and operators. For about 40 percent internet penetration there is still a portion of the population that remain off-line and excluded from the advantages of the internet.
The disconnected individuals are predominantly women and the poor. Due to the relatively wide frequency of mobile phones, telecommunications companies offer internet services with handsets.
Government involvement, policies and regulations
The local telecom regulator in Tanzania is Tanzania Communications Regulatory Authority (TCRA) under the Tanzania Communications Regulatory Act (2003). In 2015, the Government of Tanzania enacted the Cybercrimes Act and the Electronic Transactions Act. The aim of these two Acts is to improve the confidence of financial institutions in ICT since the law is addressing e-services and cyber defence. The TCRA is fighting against unregistered SIM cards as well as “fake phones”, both evidently without relevant success in spite of frequent awareness campaigns.
Last year, over 3.3 million mobile customers was active again their SIM cards, following the conclusion of the TCRA’s biometric SIM card registration scheme on 20 January. In September 2020, TCRA fined ISP Raha, a subsidiary of Liquid Telecom, a total of TZS11.8 billion (USD5.1 million) for breaching regulations. The Tanzania Communications Regulatory Authority discontinued the new data tariffs offered by the country’s mobile operators, following disapproval from customers that they are too high in April. Media reports indicate that telecoms firms revised their prices for voice calls, SMS and data services in order to align their tariffs with new legislations published by the regulator which came into consequence on 2 April 2021.
Lately, Ministry of Communication and ICT in Tanzania signed a contract to extend the National Information Communication and Technology Broadband Backbone (NICTBB) to interconnect with neighbouring Mozambique. The 72km extension will run from Mangaka to Mtambaswala on the border with Mozambique, from where it will interconnect across the Unity Bridge to Negomano in Mozambique.
The contract, valued at TZS2.4 billion (USD1 million) was concluded in January 2021, with the network scheduled for completion in July 2021. The NICTBB presently reach the borders of six surrounding countries, namely Burundi (Kabanga and Manyovu), Rwanda (Rusomo), Uganda (Mutukula), Kenya (Sirali, Namanga and Horohoro), Zambia (Tunduma) and Malawi (Kasumulo).
The relaxation of the telecommunication sector in Tanzania has opened up access to establish new operations, particularly for mobile phone operators, public data communication operators, closed user group data communication providers, radio paging service providers and Internet service businesses. Also, opportunities subsist to render modern technology and support infrastructure to the contemporary industry operators. Availability of secure credentialing will be an important area of possibility.