Tanzania: Tanzania Communication Profile

Tanzania’s economy has been showing solid increase rates of between 5% and 8% each year since 2000 which remained virtually unharmed by the world economic crisis. For the period 2013-2017, the International Monetary Fund predicts stable GDP increase at around 7% per annum.

Mining and tourism are major industry sectors. However, the country continues to suffer from underdeveloped infrastructure, inclunding roads, railways, electricity and telecommunications.

Tanzania’s ICT sector is rapidly expanding and has become a strong pillar for the country’s socio economic development. The country’s fast growth on Information and Communication Technology (ICT) has lured more investors into the sector. Currently, the sector is growing at between 15% and 20% annually which shows that it is the highest in the East African Community (EAC) region.

Regulatory Framework

Ministry of Communication, Science and Technology
Ministry of communication, science and technology is responsible for implementation of posts and telecommunication policies, development and application of technology and dissemination of research findings regarding on technology and implementation of information technology programmes in the country.

Ministry Of Information, Culture and Sports
Functions of the Ministry include;

• Develop regulatory regime that facilitates free flow of information
• Improve public access to cultural life and promote the national language as the major national identity.
• Improve access, quality, equity and management of sports and games, traditional games and sports Infrastructure at all levels
• Improve access and equity in games and sports at all levels.
• Actively fight the epidemic of HIV/AIDS
• Creating a conducive environment for efficient and effective delivery of services
• Strengthen policy formulation.
• Educate the society on issues related to leadership, good governance and capacity building
• Monitor and coordinate performance of all institutions under the Ministry

Policies

National ICT Policy of 2003
The National ICT policy was formulated in 2003 to address issues prevailing such as poor harmonization of initiatives that led to random adoption of different systems and standards, unnecessary duplication of efforts and waste of scarce resources, especially through the loss of potential synergies. The policy states Tanzania’s vision on ICT which is to become a hub of ICT Infrastructure and ICT solutions that enhance sustainable socio-economic development and accelerated poverty reduction both nationally and globally.

National Telecommunications Policy of 1997
The National Telecommunication Policy (NTP) was formulated with the view to ensure accelerated development of an efficient telecommunications network and universal access to telecommunications services by all sectors of the national economy.

The government has actively embraced the principles of competition and a private sector inclunding foreign participation as a means of rapidly advancing economic and social development. Policy reforms have led to the telecom sector becoming one of the additional 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 increase of additional 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 inclunding 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. An extra new gain source is mobile money transfer and m-banking.

The landing of the initial 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 initial phase of a national fibre backbone network to connect people 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 part the 12 licensed mobile operators;
• Estimate for mobile market to 2014 and 2017.

Estimated market penetration rates in Tanzania’s telecoms sector –

(Source: BuddeComm based on various sources)