Tanzania Telecoms Sector Expected to Expand

The Tanzania telecoms sector is expected to grow by approximately 25 percent during the first half of 2009 and it is estimated to then support around 13 million subscribers, most of which will be represented by cellular providers.

The telecoms sector in Tanzania is one of the fastest growing sectors in the country; according to Government statistics, the sector grew from 19.1% in 2006 to 20.1% in 2007 regulators of the sector believe that it is likely to continue this pattern of growth.

In an interview with Reuters, the Director for the Tanzania Regulatory Authority (TCRA), John Nkoma, said that he believed that the country could easily reach the goal 13 million subscribers.

“Hardly four years ago we were less than two million,” said Mr. Nkoma, “Towards the middle of 2009, we should easily reach 13 million.”

Based on reports from the end of June, the telecoms sector currently boasts 10.43 million subscribers, which is a significant increase from the 8.48 million it claimed at the end of 2007.

By the end of this year, Mr. Nkoma said that he expects the sector to reach between 10.5 million and 11 million subscribers.

According to Mr. Nkoma, the penetration rate for both the mobile and the fixed lines in Tanzania currently stands at around 25 percent, which means that it is still an attractive option for those who are still interested in entering the sector.

At the end of November, two new local firms, MyCell and Egotel, were issued licenses for fixed lines, mobile networks and other services.

In addition to these licenses, Zain Tanzania, an affiliate of the Kuwait-based company, was also granted a license by the TCRA to install an international gateway in the country, thus becoming the fifth firm, alongside the state-run Tanzania Telecommunications and three other firms, to hold such a license.

According to a report from last October, Zain Tanzania has indicated that it expects to invest approximately USD180 million into its network in the country.

An application from Smile Communications Tanzania, which is owned by Mauritius’ Smile Telecoms Holdings Ltd. also currently remains pending, while, at the same time, two other companies, namely HITS Telecom Tanzania and Dovetel, are also in the process of establishing their own networks.

The telecoms sector in the country continues to face the problem of a lack of penetration into the rural areas of the country as well as the problem of an abuse of SIM cards.

In order to begin to address these problems, Mr. Nkoma has said that the TCRA has been actively pursuing legislation that will require subscribers to register with their individual networks.