GOT IT COVERED

Tanzania 2018 | TELECOMS & IT | REVIEW

The increasing importance of ICT for business and GDP comes as no surprise to Tanzania, which has been successfully overhauling the sector at home and in the region.

Tanzania's telecoms industry has over the last year gone through considerable changes in almost all aspects, including content, medium, and regulations. New laws regarding ownership of media as well as a redefined mission from the state broadcaster are paving the way for the country's telecoms and IT sector to become a regional leader in all senses.

In July 2017, the country hosted the Mobile 360 Telecom Conference in Dar es Salaam, bringing together Tanzania's major private sector and civil society players to find solutions to some of the challenges the country is facing with its telecoms industry. Tanzania faces problems such as poor connectivity and infrastructure, a lack of human capital, and budgetary constraints. Combined, these issues have made it difficult to extend telecoms service to rural areas.
Tanzania has several mobile network operators, the largest of which are Vodacom, Airtel, Tigo, and Halotel. The South African Vodacom has over 10 million subscribers in Tanzania and entered the country's market in 1999, quickly becoming the largest operator. Vodacom's GSM and GPRS coverage reach over 75% of the population, and its EDGE coverage reaches approximately 50% of the population. Airtel is the country's second-largest operator by total wireless customers, claiming some 1.7 million users, or about 26% of the market. Tigo markets itself as a lifestyle brand, offering a full range of voice, text, and high-speed internet. Tigo has some of the best coverage in the country, opening over 500 new network sites just between 2013 and 2014. Halotel, the state-owned operator of Vietnam, has invested over USD1 billion in Tanzania. It became the first company approved to lay its own fiberoptic cable in the country, and has since laid more than 18,000km of cable in 26 regions of the country. In terms of voice telecoms subscriptions, Vodacom holds 32% of the market share, Tigo has 28%, Airtel holds 26%, and Halotel claims 9%.
In July 2017, Vodacom Tanzania received approval from the capital markets regulator to extend its IPO until the end of the month, following a much-celebrated decision by the government to allow foreign nationals to buy shares on the Dar es Salaam Stock Exchange. The company is confident the extension will boost investment from internationals and hopes to be listed on the stock exchange no later than early 2H2017. The IPO began in April of the same year, when participation was restricted to Tanzanians; however, a slow uptake led the telecoms provider to extend the offering by three weeks. The July extension was Vodacom's second such extension. Local law requires Tanzanian telecoms providers to guarantee at least 25% local ownership at the IPO.
The country's third-largest operator, Airtel, was also in the midst of an IPO in July 2017. Through its IPO, the company is expected to bring in TZS25 billion, a sum considerably less than expected; considering Airtel holds a 26% subscription market share, analysts anticipated a much higher share offer, closer to its competitor's Vodacom Tanzania, which is seeking a TZS476 billion market share.
With the continued evolution of industry players, products and services are evolving in tandem. The number of mobile payments and financial transactions have been growing steadily. The country has more than 17.3 million mobile money subscriptions, with the market divided with three main players: Airtel Money, M-Pesa, and Tigo Pesa.
TBY sat down with Eric Mwenda, the CEO of Wia Group, an ICT leader in the country. “Tanzania is beginning to demonstrate and market its capacity in the industry," Mwenda said. “Today, we have incubators all over the country and a lot of young people are becoming involved in the sector. These young people are providing solutions locally, and the next challenge will be to start driving these local content applications internally and externally."