Tanzania - Telecoms, Mobile, Broadband and Forecasts

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Tanzania - Telecoms, Mobile, Broadband and Forecasts

Mobile broadband gains traction with operator investment

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, despite the global economic crisis which has affected many economies since 2008. For the period 2013-2017, the International Monetary Fund predicts stable GDP growth at around 7% per annum.

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 among the most liberal 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 mobile penetration is approaching 70%, with annual subscriber growth of more than 20%. In recent years a price war among these players has adversely affected the smaller operators, which have suffered from customer churn.

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. Operators are hoping for revenue growth in the mobile data services market, given that the voice market is almost entirely prepaid and voice ARPU continues to fall. To this end they have invested in network upgrades, with both Vodacom and Smile Communications developing services based on Long-term Evolution (LTE) technology. A fast developing source of revenue is from mobile money transfer and m-banking services. In mid-2013 Bharti Airtel estimated that in Tanzania over 10% of GDP is transacted through mobile commerce.

In March 2013 the regulator reduced interconnection rates by 70%. Combined with a stringent registration policy, requiring new customers to have a physical ID, the reduced rates dampened growth in the number of mobile subscribers for some operators.

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 wars continue to hurt smaller operators;
Low ARPU is encouraging mobile operators to develop mobile data and commerce services;
Consolidation likely among licensed mobile operators and ISPs;
Regulator sets voice interconnection rates to 2017;
Government allocates TZS17.5 billion (US$10.8 million) to improve rural telecom infrastructure;
Smile Communications trials VoLTE services;
Government reviews ICT policy, considers measures to tackle cybercrime;
TTCL opens a new microwave link connecting Dar es Salaam and Zanzibar, doubling data capacity;
Forecast for mobile market to 2014 and 2017.

Estimated market penetration rates in Tanzania's telecoms sector end-2013
Market | Penetration rate
Mobile | 75%
Fixed | 0.4%
Internet | 14%
(Source: BuddeComm based on various sources)

Key developments:

Regulator's market data to September 2013; interconnection rates update; telcos' operating and financial data to Q3 2013; government funds rural telecom infrastructure; Smile Communications trials VoLTE services; m-commerce and m-banking developments; market developments to early 2014.

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.

1. Executive summary
2. Key statistics
3. Telecommunications market
3.1 Overview of Tanzania's telecom market
4. Regulatory environment
4.1 Background
4.2 Regulatory authority
4.2.1 TCRA
4.3 National Telecommunications Policy 1997
4.4 National ICT Policy 2003
4.5 Regulatory overhaul 2005
4.6 Electronic and Postal Communication Act 2010
4.7 Telecom sector liberalisation
4.7.1 Converged licensing framework (CLF) since 2005
4.7.2 International gateways
4.8 Interconnection
4.9 Universal Service Fund
4.10 Foreign ownership restrictions
4.11 Registration of subscriber details
4.12 Mobile Number Portability (MNP)
5. Fixed network operators
5.1 TTCL
5.1.1 Privatisation and exclusivity period 2000-2005
5.1.2 SaskTel management contract 2007-2009
5.1.3 Future direction
5.2 Zantel
5.3 BOL
6. Fixed-line infrastructure
6.1 Fixed-line statistics
6.2 TTCL's fixed-line network
6.3 Wireless local loop (WLL)
6.4 Private networks
6.5 National fibre backbone
6.6 International infrastructure
6.6.1 Submarine fibre
6.6.2 Satellite
6.6.3 Terrestrial
7. Internet market
7.1 Overview
7.1.1 Internet statistics
7.2 Limited availability of PCs
7.3 Public internet access locations
7.4 Tanzania's ISP market
7.4.1 Major ISPs
7.4.2 Tanzania Internet Exchange (TIX, AIXP)
7.5 ccTLD management
8. Broadband market
8.1 Overview
8.2 ADSL
8.3 Wireless broadband
8.3.1 iBurst
8.3.2 EV-DO
8.3.3 WiMAX
9. Digital economy
9.1 Voice over Internet Protocol telephony
9.2 E-health
9.3 E-learning
9.4 Facebook
10. Mobile communications
10.1 Overview of Tanzania's mobile market
10.1.1 Mobile statistics
10.2 Major mobile operators
10.2.1 Vodacom Tanzania
10.2.2 Bharti Airtel (formerly Zain, Celtel)
10.2.3 Millicom Tanzania (Mobitel, Tigo)
10.2.4 Zantel
10.3 Tariffs
10.3.1 Special regional tariffs
10.3.2 Free international roaming
10.3.3 Price war 2010
10.3.4 Mobile Termination Rates (MTRs)
10.4 Mobile data services and pricing
10.4.1 Third Generation (3G)
10.4.2 Long-term Evolution) (LTE)
10.4.3 Blackberry
10.4.4 Mobile money transfer, m-banking
10.4.5 Mobile TV
11. Forecasts
11.1 Forecasts mobile market 2014, 2017
11.2 Notes on scenario forecasts
12. Related reports
Table 1 Country statistics Tanzania 2013
Table 2 Fixed-line network statistics 2013
Table 3 Internet provider statistics 2013
Table 4 Internet user statistics 2013
Table 5 Mobile statistics 2013
Table 6 National telecommunications authority
Table 7 Interconnection rates 2012- 2017
Table 8 Historic - Fixed lines in service by operator and teledensity 1999 - 2004
Table 9 Fixed lines in service by operator and teledensity 2005 - 2013
Table 10 Historic - Internet users and penetration rate 1999 - 2004
Table 11 Internet users and penetration rate 2005 - 2013
Table 12 Internet users and penetration rate 2005 2013
Table 13 Historic - Mobile subscribers and penetration rate 1999 - 2004
Table 14 Mobile subscribers and penetration rate 2005 - 2014
Table 15 Mobile voice subscribers by operator 2011 - 2013
Table 16 Mobile voice subscriber market share by operator 2011 - 2013
Table 17 Vodacom Tanzania subscribers 2000 - 2013
Table 18 Vodacom Tanzania ARPU 2003 - 2013
Table 19 Airtel subscribers 2002 - 2013
Table 20 Zain Tanzania ARPU 2002 - 2009
Table 21 Millicom Tanzania mobile subscribers 2000 - 2013
Table 22 Zantel mobile subscribers 2000 - 2013
Table 23 Forecast mobile subscribers 2014; 2017
Chart 1 Mobile subscribers in Tanzania 2005 - 2014
Exhibit 1 Licences issued under the new CLF 2006 - 2012
Exhibit 2 Emergency rescue scheme for Lake Victoria

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