TanzaniaInvest interviewed Prof. John S. Nkoma, Director General of the Tanzania Communications Regulatory Authority (TCRA), to learn about the current status of the Tanzania telecom sector. TanzaniaInvest had the pleasure to first interview Prof. Nkoma in 2006. Since then Tanzania has done huge steps in its telecom infrastructure development, as Prof. Nkoma explains.
TanzaniaInvest.com : It is a pleasure interviewing you six years after our first meeting, when you had just reshaped your licensing regime and mobile internet was spreading faster than expected. During that time you were also deploying your cable network throughout Tanzania. Can you give a snapshot on the ICT situation in Tanzania now in terms of broadband internet and mobile penetration?
Professor Nkoma : It nice to see you after almost seven years. During this time the telecom sector in Tanzania has grown very fast. The mobile penetration now is about 28 million sim cards which is really exponential growth. The internet penetration is about 5 million and we have 3 submarine cables: The Eassy cable and C-Com SEACOM cable. The Eassy cable comes from Durban, South Africa to Maputo, Mozambique, connecting through Dar es salaam, to Mombasa and meeting cables from Asia to Europe in the Middle East.
{xtypo_quote_right} The mobile penetration now is about 28 million sim cards. The internet penetration is about 5 million and we have 3 submarine cables {/xtypo_quote_right}
SEACOM is also the same route. In addition to those cables the Tanzanian government has invested almost 10,000kms of terrestrial cable. So we are linking ourselves to all our 8 neighboring countries.
In terms of Mobile phone penetration this is now approximately 60% and there is definitely still room for growth.
In terms of licensing, there is a network facility license for infrastructure; network services license for provision of voice, video and data; Application services license for internet mobile service penetration and value added services, like money transfer and payment of electricity and water bill and so forth, and also the Content service License for radio and television.
TI : Talking about mobile phone payment system, which was initiated in East Africa has since then boomed. How would you explain that such innovative payment system started here?
PN : I think it is out of necessity. In Europe the use of credit cards is are widespread. In this part of the world credit cards are not widely used. So the mobile phone money payment was a natural growth due to lack of credit card facilities and the need to use less cash.
80% of the Tanzanian population live in the rural areas. Urbaners transfer money to the rural areas via mobile banking. In my view, the mobile phone banking has complemented the role of a credit card or debit card.
TI : In your opinion, with the way things are developing in the country, do you think the unbanked population in Tanzania will still need a bank account?
PN : The banks are very formal. Mobile banking is very straight-forward. So I think for a lot of people, that is enough for them. But others need more than just mobile banking services and will refer to formal banks.
{xtypo_quote_left} mobile banking and formal banking are complementary. Right now people are paying their insurances, social security, pay TV, electricity bills and water bills on mobile banking. {/xtypo_quote_left}
The point is that mobile banking and formal banking are complementary. Right now people are paying their insurances, social security, pay TV, electricity bills and water bills on mobile banking. This is normal right now and very popular.
TI : You have three submarine cables. You have a decently high mobile penetration, you have introduced innovative services that allow for financial inclusion. What is the country’s ICT development plan and what are the challenges ahead?
PN : The voice statistics have grown very fast. The internet is somewhat lacking behind. I think the challenge now is to make the use of internet more common.
For example, there is absolutely no reason why government services should not be available online. So there is growth in that area.
Education and e-education together with e-health, there is a lot of potential in those areas. What we are going to see are more people gaining access to those services and that will have a big impact.
TI : What are the barriers to higher internet penetration?
PN : One, will certainly be the cost. I think as much as we have submarine cables, the cost is slightly high and that needs to be lower.
Secondly, it is the skills. More people should have internet education at schools to be able to utilize this service.
TI : Talking of costs, what are the factors that can influence the cost in this country?
PN : As much as we have cables, it is important that the internet service providers are connected to the terrestrial optical fiber backbone. It has taken them time and they need to change their business models. So far they have been receiving satellite broadband.
TI : In such a fast paced environment, where do you see room for foreign direct investment play?
PN : I think it will be in infrastructure. These are all big projects. I think there is a lot of opportunity in infrastructure. In terms of services, you need the applications which are relevant. Because we talk about eHealth, eCommerce and so forth but at the end of the day you need the applications. So there is a lot of possibility there.
{xtypo_quote_right} I think there is a lot of opportunity in infrastructure. In terms of services, you need the applications which are relevant.{/xtypo_quote_right}
TI : What would be your way to explain to investors what Tanzania is about?
PN : Tanzania is a land of opportunity. First of all, there is political stability. We are probably the most political stable country in the region.
Democracy just came in this country but I think people are learning very fast. In terms of trading, the geographical location of Tanzania is very strategic, it is a port and a super highway way. There is a lot of potential. Welcome to Tanzania!
