Tanzania - Telecoms, Mobile and Broadband - Market Insights and Statistics

Executive summary

Tanzania’s Vodacom and Bharti Airtel submit bids to buy Zantel

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.

Estimated market penetration rates in Tanzania’s telecoms sector – 2014

Market
Penetration rate
Mobile
70%
Fixed
0.3%
Internet
18%

(Source: BuddeComm based on various sources)

Key developments:

  • Tigo and Vodacom sign Africa’s first m-money interoperability scheme;
  • Zantel extends 3G services to mainland Tanzania;
  • Vodacom and Bharti Airtel both submitted bids to buy Zantel from Etisalat
  • State to secure 35% in TTCL held by Bharti Airtel;
  • Viettel awarded 3G licence, expected to launch services in mid-2015;
  • AzamTV reports 34,000 satellite TV subscribers within three months of launch;
  • Etisalat increases stake in ZanTel to 80%;
  • Low ARPU encouraging mobile operators to develop mobile data and commerce services;
  • Regulator sets voice interconnection rates to 2017;
  • government allocates TZS17.5 billion ($10.8 million) to improve rural telecom infrastructure;
  • Smile Communications trials VoLTE services;
  • Government reviews ICT policy, considers measures to tackle cybercrime;
  • Tigo integrates M-Pesa service with 17 major banks;
  • Airtel, Zantel and Tigo make m-money schemes interoperable;
  • TTCL opens a new microwave link connecting Dar es Salaam and Zanzibar, doubling data capacity;
  • Telecommunication Traffic Monitoring System delivering about $1 million in incoming international call taxes monthly;
  • Report update includes regulator’s market data to June 2014, recent market developments.

Companies mentioned 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.

Publication overview:

This report provides a comprehensive overview of trends and developments in Tanzania’s telecommunications market. The report analyses the mobile, internet, broadband, digital TV and converging media sectors. Subjects include:

  • Market and industry analyses, trends and developments;
  • Facts, figures and statistics;
  • Industry and regulatory issues;
  • Infrastructure developments;
  • Major Players, Revenues, Subscribers, ARPU, MoU;
  • Internet, VoIP, IPTV;
  • Mobile Voice and Data Markets;
  • Broadband (FttP, DSL, cable, wireless);
  • Convergence and Digital Media;
  • Mobile subscriber forecasts to 2017;
  • Government policies affecting the telecoms industry;
  • Market liberalisation and industry issues;
  • Telecoms operators – privatisation, IPOs, acquisitions, new licences;
  • Mobile technologies (GSM; 3G, HSPA, LTE).

Table of Contents

  • 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)
    • 4.13 Universal Communication Services Access Fund (UCSAF)
  • 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 Cable modem
    • 8.4 Pay-TV
    • 8.5 Wireless broadband
      • 8.5.1 iBurst
      • 8.5.2 EV-DO
      • 8.5.3 WiMAX
      • 8.5.4 Mobile broadband
      • 8.5.5 Satellite broadband
  • 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
      • 10.1.2 Tower infrastructure
    • 10.2 Major mobile operators
      • 10.2.1 TTCL
      • 10.2.2 Vodacom Tanzania
      • 10.2.3 Bharti Airtel (formerly Zain, Celtel)
      • 10.2.4 Millicom Tanzania (Mobitel, Tigo)
      • 10.2.5 Zanzibar Telecommunication (Zantel)
      • 10.2.6 Viettel
    • 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)
      • 10.3.5 Mobile Number Portability (MNP)
    • 10.4 Mobile data services and pricing
      • 10.4.1 Third Generation (3G)
      • 10.4.2 Long-term Evolution) (LTE)
      • 10.4.3 Mobile money transfer, m-banking
      • 10.4.4 Mobile TV
      • 10.4.5 Mobile satellite services
  • 11. Forecasts
    • 11.1 Forecasts – mobile market – 2014, 2017
    • 11.2 Notes on scenario forecasts
  • 12. Related reports
  • Table 1 – Country statistics Tanzania – 2014 (e)
  • Table 2 – Fixed-line network statistics – 2014 (Jun)
  • Table 3 – Internet provider statistics – 2013
  • Table 4 – Internet user statistics – 2014 (e)
  • Table 5 – Mobile statistics – 2014 (Jun)
  • Table 6 – National telecommunications authority
  • Table 7 – Interconnection rates – 2012- 2017
  • Table 8 – TTCL financial data – 2010; 2013 - 2014
  • Table 9 – Historic - Fixed lines in service by operator and teledensity – 1999 - 2004
  • Table 10 – Fixed lines in service by operator and teledensity – 2005 - 2014
  • Table 11 – International bandwidth – 2001 - 2013
  • Table 12 – Historic - Internet users and penetration rate – 1999 - 2004
  • Table 13 – Internet users and penetration rate – 2005 - 2015
  • Table 14 – Internet users and penetration rate – 2005 – 2015
  • Table 15 – Internet subscribers – 2008 - 2015
  • Table 16 – Internet cafes in service – 2008 - 2014
  • Table 17 – Historic - Fixed-line internet subscribers – 2001 - 2007
  • Table 18 – Fixed-line broadband subscribers – 2005 - 2014
  • Table 19 – Cable modem broadband subscribers – 2005 - 2014
  • Table 20 – Active mobile broadband subscribers and penetration rate – 2008 - 2004
  • Table 21 – Historic - Mobile subscribers and penetration rate – 1995 - 2004
  • Table 22 – Mobile subscribers and penetration rate – 2005 - 2015
  • Table 23 – Mobile voice subscribers by operator – 2011 - 2014
  • Table 24 – Mobile voice subscriber market share by operator – 2011 - 2014
  • Table 25 – TTCL mobile subscribers – 2006 - 2014
  • Table 26 – Vodacom Tanzania subscribers – 2000 - 2014
  • Table 27 – Vodacom Tanzania active subscribers – 2011 - 2013
  • Table 28 – Vodacom Tanzania ARPU ($) – 2003 - 2014
  • Table 29 – Vodacom Tanzania ARPU (TZS) – 2011 - 2014
  • Table 30 – Airtel subscribers – 2002 - 2014
  • Table 31 – Zain Tanzania ARPU – 2002 - 2009
  • Table 32 – Millicom Tanzania mobile subscribers – 2000 - 2014
  • Table 33 – Zantel mobile subscribers – 2000 - 2014
  • Table 34 – Average mobile tariffs – 2005 - 2014
  • Table 35 – Forecast mobile subscribers – 2014; 2017
  • Chart 1– Fixed lines in service by operator and teledensity – 2005 – 2014
  • Chart 2 – Mobile subscribers in Tanzania – 2005 - 2015
  • Exhibit 1 – Licences issued under the new CLF – 2006 - 2012
  • Exhibit 2 – Emergency rescue scheme for Lake Victoria

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