How much more room for growth is there before the telecoms market becomes saturated?
The market already has about 60% penetration, and given the child-to-adult ratio, in terms of population with disposable income, the figure is probably close to 85% penetration today. Furthermore, the Tanzanian market has one of the lowest rates in Africa, whereby most tariffs are low in Africa. Given that I do not foresee any more than three or four players operating profitably in this market in the long term, it will be difficult for a fifth operator to enter profitably, given the state of the tariffs, the capacity, and the penetration.
What are Airtel's main competitive advantages over the other telcos?
The first competitive advantage is our network, which is the widest in Tanzania. It offers access to many rural regions of Tanzania, and this yields a clear competitive advantage. I would highlight our sales and distribution spread, as well as the width and depth of this market. I also believe that the consumer has started relating to our propositions and the range in the composite new market through our Yatosha campaign, and more our recent and ongoing Switch On data-oriented campaign which is geared to the youth market.
What are Airtel's strategies on the widening of its rural distribution?
Our distribution approach is for each village to have a store. Once this primary target is reached it must be able to sell a range of services ranging from airtime and SIM cards to Airtel Money. The second part of the strategy involves consumers accepting the advantage that Airtel Money, a mobile payment system, has to offer in terms of purchasing their daily needs, be that food or other basic services. We cover around 86% of Tanzania today.
Airtel recently upgraded's Mobile Money platform. Can you please elaborate on the investment in technology to enhance your product offering?
We are making significant investment in all areas, and we have, for instance, allocated around $2 million in the Mobile Money platform alone. The second major investment we have realized is to our billing platform, which will enable a more flexible billing system for our high-value and corporate customers. Thirdly, we are set to make significant investments in the 3G and Data Services arena.
How do you see mobile money developing in Tanzania, and how will Airtel further incorporate this trend?
In terms of value and turnover, it probably constitutes 30% to 40% of GDP. It has to be the natural means of paying and receiving payment, and is destined to become the next business transformation we will undergo. Mobile money when needed becomes ready cash, and is changing the way we buy goods and services, as well as the way that we save and earn interest, all on a common platform. This is not only a commercial transformation, but one with the capacity to impact the whole economy. We need to embrace this technology and to get it right.
What is Airtel's strategy regarding social media?
Looked at from a consumer perspective, the tendency is to go online via social media, and therefore the primary use of the internet will either be through Facebook, Twitter, or Whatsapp. Tanzania's population is young, with a median age of around 16 or 17 years of age. It is at this age that communication becomes all about friends and relationships. In addition, there is the influence of the diaspora abroad.