Executive summary
One of the first 4G/LTE markets in Africa
This annual report provides a comprehensive overview of trends and developments
in Tanzania’s telecommunications market. Subjects covered include:
- Key statistics;
- Market and industry overviews;
- Government policies affecting the telecoms industry;
- Market liberalisation and regulatory issues;
- Telecoms operators – privatisation, acquisitions, new licences;
- Major players (fixed, mobile and broadband);
- Infrastructure development;
- Mobile voice and data markets, including 3G;
- Internet development and pricing;
- Broadband, including 3G mobile;
- Convergence (voice/data, fixed/wireless/mobile).
Average Revenue per User (ARPU).Tanzania’s economy has been showing solid growth
rates of between 5% and 8% every year since 2000 which remained virtually
unharmed by the global economic crisis. For the period 2013-2017, the
International Monetary Fund predicts stable GDP growth at around 7% per annum.
Mining and tourism are main industry sectors. However, the country continues to
suffer from underdeveloped infrastructure, including roads, railways,
electricity and telecommunications.
The government has actively embraced the principles of competition and a private
sector including foreign participation as a means of rapidly advancing economic
and social development. Policy reforms have led to the telecom sector becoming
one of the more liberal ones in Africa. However, high import tariffs on telecoms
equipment and taxes on telephone facilities by various authorities are still
placing a burden on investors and operators.
Tanzania has two fixed-line operators (TTCL and Zantel) and eight operational
mobile networks, with four additional players licensed under a new converged
regulatory regime. With four major operators – Vodacom, Bharti Airtel (formerly
Zain), Tigo and Zantel – the mobile market broke the 60% penetration barrier at
the end of 2011, with annual subscriber growth of more than 20%. The year was
characterised by a price war which inflicted heavy subscriber losses on the
smaller operators in 2012.
The new converged licensing regime has brought a large number of new players
into the market. The liberalisation of voice over internet protocol (VoIP)
telephony as well as the introduction of third and fourth generation (3G, 4G)
mobile services and wireless broadband networks is boosting the internet sector
which has been hampered by the low level of development of the traditional
fixed-line network.
Following the launch of 3G mobile broadband services, the mobile networks are
becoming the country’s leading internet service providers on the back of their
extensive national infrastructure and existing subscriber bases in the voice
market. The additional revenue from data services is badly needed in an almost
entirely prepaid environment with rapidly falling voice ARPU. Another new income
source is mobile money transfer and m-banking.
The landing of the first fibre optic international submarine cables in the
country in recent years has revolutionised 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 national fibre backbone network
to connect population centres around the country. However, the cost of
international internet bandwidth has so far not come down by as much and not as
quickly as expected.
Market highlights:
Price war is hurting smaller operators;
Very low average revenue per user (ARPU);
Consolidation likely among the 12 licensed mobile operators;
Forecast for mobile market to 2014 and 2017.Estimated market penetration rates
in Tanzania’s telecoms sector – end 2013
Estimated market
penetration rates in Tanzania’s telecoms sector – end 2013
Market
|
Penetration rate
|
Mobile
|
75%
|
Fixed
|
0.4%
|
Internet
|
14%
|
Companies covered in this report:
Tanzania Telecommunications Company (TTCL); Zanzibar Telecommunications
Corporation (Zantel); Vodacom Tanzania; Bharti Airtel (Zain); Millicom (Tigo);
Benson Informatics Limited (BOL); Sasatel (Dovetel); Africa Online; Raha.com;
Tele2; Alink; SatCom Networks; SimbaNet; Afsat; Cats-Net.
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