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Tanzania 2017 | TELECOMS & IT | VIP INTERVIEW

TBY talks to Diego Gutierrez, General Manager of MIC Tanzania (Tigo), on growth of the telecoms sector in Tanzania and opportunities ahead.

What differentiates Tigo from other telecoms firms in Tanzania?

Tigo has gone through an interesting transformation in the last four years, going from a voice offering company to a multi-service, nationwide, and well-established company offering voice, data, mobile money, and B2B services. It is a completely different company compared to what it was a few years ago. Over the last two years, Tigo has been the fastest-growing company and is the second-largest company in the market. We focused on digital inclusion and penetration by offering widely available data services and not only being an internet provider, but also giving our subscribers a partnership in content. We made deals with companies like Facebook, Whatsapp, Youtube, and various smartphone suppliers to enhance the customer's digital experience. It has not just been about giving them access to data but about helping them learn what data is for, helping them have access to content and develop partnerships that create habits. Our network has doubled in size in the last four years. We were strong on the coast and have one of the biggest footprints, which has also contributed to growth. We were also the first big operator to roll out 4G services in 2015, and that has given us a lead in the data positioning and in terms of capturing high-value customers in that segment. Tigo has pioneered various products such as cross-border transactions for mobile money, an app for mobile money, the first company to give profit sharing capabilities to customers that held money in their wallets, for example. These have all helped us gain attention and grow in the market.

What further opportunities do you see in Tanzania?

There are two main areas. Firstly, data continues to be an interesting opportunity as demand for internet is high and penetration is low. The other area is B2B, which remains under exploited and there is a lot to still be done there. We are investing in a top-of-the-line, tier-three data center in Tanzania. It will be one of the only ones in the country and will help satisfy the demand for corporate and government institutions to back up their data. Besides the data centers, we want to focus on data connectivity, SIP trunking, and a variety of other services and fields. We have been investing an average of $100 million a year to expand our network and our capacity to cater for more subscribers and to improve the quality of the network and the customer experience, as well as invest in new services such as B2B, mobile money, content and data, and platforms. Tanzania is the most sophisticated mobile money market in the world, with four players competing successfully in that field. As competition increases, there is a constant drive and race to be better and offer more from all the players. This is only scratching the surface because as you create more options and services for customers to use their wallets, the results become more and more dynamic. The number of transactions in Tanzania is surpassing that of Kenya; therefore, it is great to be here and be a part of these exciting developments in Tanzania.

What are the biggest challenges to further growth in the sector here?

There are several challenges. Access to basic services like electricity is low. To run a network in rural areas requires generators running on fuel, which is expensive to maintain. Another challenge is high taxes in the telecoms sector. The level of taxation on that sector is one of the highest in Africa; hence, for us to invest there needs to be incentives and proper returns. The higher the taxes, the more difficult it is for us to justify investments to our shareholders. We have a responsibility to our shareholders to give them decent returns. There is also the need for a predictable and stable regulatory environment where we know things will remain the same for years to come, in order to be able to plan long-term investment. We have ongoing conversations and meetings with the authorities and I have good hopes that this administration will support the industry on these issues.

What is your outlook for Tigo for 2017?

We want to be market leaders in 2017, and we will become that as we are almost achieving this already. TCRA figures show that we are moving in this direction. Other than that, this country offers incredible opportunities. I hope the new administration follows its policy of providing ICT access to the entire population and creating an environment in which investors feel confident in continuing to invest, which means a sensible taxation regime and a regulatory environment that is clear and predictable. With that in place, there are great prospects for the country.