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Tanzania Communications Regulatory Authority Interview

The Tanzania Telecom Sector Overview

TANZANIAINVEST has been interviewing Prof. John S. Nkoma, Director General of the Tanzania Communications Regulatory Authority (TCRA), to learn about the Tanzania telecom sector and about the role of its institution within such framework.

Prof. John S. Nkoma, Director General of the Tanzania Communications Regulatory Authority

Prof. Nkoma has over 25 years experience in University teaching, Research and Development, and Senior Management. Prof. Nkoma’s fields of research interests include the study of the interaction of electromagnetic waves with matter, and the role of science and technology such as ICTs on development.

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TI: Could you provide us with an overview of the current ICT situation in Tanzania, including recent historical development?

Prof. John Nkoma – Tanzania Communications Regulatory Authority: The ICT sector in Tanzania is completely liberalised.

This can be traced back to 1993 when the then TPTC (Tanzania Postal and Telecommunication Co) was dissolved to form three entities: first the Tanzania Communications Commission (TCC), the regulator through the enactment of an Act No. 18 of 1993; secondly the Tanzania Telecommunications Company Limited (TTCL), an operator offering telecommunication services; and thirdly the Tanzania Postal Corporation (TPC), an operator offering postal services.

On a related front, the Tanzania Broadcasting Commission was also established in 1993 as the regulator for Radio and TV broadcasting in Tanzania.

Due to convergence of technology and services, TCC and TBC were merged in 2003 to form the Tanzania Communications Regulatory Act (TCRA) through the Act, No. 2 of 2003, to regulate telecommunications, broadcasting and postal matters.

What makes the new licensing system so pioneer in Africa?

JN: The TCRA introduced the Converged Licensing Framework (CLF) on 23rd February 2005, immediately after the TTCL exclusivity ended on 22nd February 2005, making this a pioneering move in the African continent.

Basically, the CLF has four categories of licenses: Network facility license, Network Services License, Application Services License and Content Services License. {xtypo_quote_right}The TCRA introduced the Converged Licensing Framework (CLF) […] immediately after the TTCL exclusivity ended […] making this a pioneering move in the African continent.{/xtypo_quote_right}

Each of the licenses has four market segments: International, national, Regional and District, with the CLF having a fifth market segment of Community.

The licenses are technology neutral and service neutral.

The licenses are described in detail below.

(i) Network Facilities License (NFL): This license allows the licensee to be the owners of facilities such as Satellite earth stations, broadband fibre optic cables, telecommunications lines and exchanges, radio communications transmission equipment, mobile communications base stations and broadcasting transmission towers and equipment.

They are the fundamental building block of the convergence model upon which network, applications and content services are provided.

(ii) Network Services License (NSL): This license allows the licensee to provide the basic connectivity and bandwidth to support a variety of applications.

Network services enable connectivity or transport between different networks. A network service provider is typically also the owner of the network facilities.

However, a connectivity service may be provided by a person using network facilities owned by another licensee.

(iii) Applications Service License (ASL): Licenses in this category provide particular functions such as voice services, data services, content-based service, electronic commerce and other transmission services.

Applications services are essentially the functions or capabilities, which are delivered to end-users.

(iv) Content services License (CSL): Licenses in this category provide radio and TV broadcast services and newer services such as online publishing and information services.

Other categories of licenses include: Frequency User License, Installation and Maintenance License, Importation and Distribution License.

Until 30th June 2006 TCRA granted various licenses in different market segments under the new converged licensing framework as shown in the table below:

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Type of License Market Segment     
N. of Licenses Issued    
Network Facility National
International 3
Network Services National
International 3
Application Service National
International 17
Content Service National Television 4
Regional Television 5
District Television 27
Community Television 2

How far is the country from being properly interconnected inside and outside?

JN: Tanzania is to be interconnected with the outside world using one, Submarine cables and two, terrestrial cables, and the interconnections within Tanzania using cable, wire and wireless.

What is the real need for fixed line telephone lines, and a country cable backbone instead of wireless solutions?

JN: To answer this question, let us look at the subscriber base over the past eleven years 1995 – 2006, where the growth has been exponential.

1995 88,000 
2,198 90,198
1996 101,000
3,200 104,200 
1997 114,600 20,045
1998 121,76936,143157,912
1999 150,220
50,100 200,320
2000 173,591110,518284,109
2001 177,802  
275,557 453,359
2002 161,590606,859768,449
2003 147,006
2004 148,3601,942,0002,090,360
2005 150,3602,963,737
Sept-06 158,2275,718,641

This growth could be attributed to fair and transparent regulations that encourage fair competition among service providers.

How do you combine cable and wireless technologies for optimum results in terms of quality and affordability of ICT?

Tanzania is a large country, and thus there is a need to combine appropriately cable and wireless technologies.

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TI: What are the main development projects and challenges ahead?

JN: TCRA has several development projects and challenges including the following:

1. Universal Service Obligations.

One of the objectives of the National ICT Policy is to promote universal access to ICT in order to improve the economy and to broaden Tanzanian opportunities for knowledge sharing and for generating local contents.

The policy aims at reducing the ICT provisions gaps between regions and communities, supporting the digital divide between the urban areas and rural areas, for example by promoting construction of rural tele-centres and encouraging local government authorities in ICT utilization and promotion.

2. Infrastructure Development.

As you can recall in year 2005, the Ministry of Communication and Transport formed a task force that sought to promote the concept of infrastructure and the interconnectivity of the networks.

The idea was to promote an ICT infrastructure backbone that would attract investors to expand further ICT coverage in the country.

Lack of ICT Backbone hinders extension of access to basic services to under served areas especially rural areas.

3. Analogue to Digital Broadcasting migration.

This is a global trend of switching from Analogue Broadcasting to Digital Broadcasting.

Broadcasting plays a central role in modern democratic societies notably in the development of and dissemination of social value.

It is challenge to all stakeholders to pursue this unavoidable trend and as a way forward TCRA prepared a consultative paper that will allow stakeholders to contribute towards formulation of digital broadcasting policy, licensing and legal framework.

The switch over date to digital broadcasting has been agreed by ITU to be 17th June 2015.

4. Post Coding and Street Naming.

Creating the Postcodes and naming streets is one big challenge facing the communication sector in Tanzania.

Postcodes and geographical address systems are coming increasingly into use.

The government recognizes the need to put in place a comprehensive geographical postal address system as was pronounced by the National Postal Policy and introduced in 2003.

This system entails the use of street or locality names and identifying buildings so as to facilitate the physical delivery of mail. With a clearly defined address to reach any citizen of Tanzania, postal exchange will have the opportunity to become more efficient.

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The system have many advantages such as provides for a unique identifying of a person by her/his locality that brings many advantages.

It leads itself very conveniently to the state institutions that wish to contact the citizen for different reasons for example taxation, medical services, fire etc.

It improves the quality of mail exchanges within Tanzania and between Tanzania and the rest of the international postal community.

It creates a database that can be used as powerful marketing tool for business community and used as means of statistical researches and more so improve human settlement in Tanzania which is in line with the government strategy of poverty eradication and improved rural planning.

5. Consumer Awareness and Education. Consumer education and awareness is believed to be very low in Tanzania compared to other countries.

With the rapid changes in technology which is going hand-in-hand with changes in product and services can [put] our consumer in dilemma.

So our consumers need to be well informed and organized to cope with the trend.

Consumers associations in Tanzania are very few and not strong enough to pressurize consumer rights from service providers in terms of prices and quality of services like what we saw from other countries.

This is a challenge to all communications stakeholders in Tanzania.

With regard to the Universal Communications Access Fund. What is the situation so far?

JN: The Universal Communications Service Access Fund (UCSAF) has been passed by parliament and is awaiting the presidential assent.

The main highlights are that the fund will be administered by a manager who will be reporting to a board of directors.

TCRA will be one of the members of the Board, and will contribute to the fund.

What, if any, are the most interesting opportunities for FDI and investment modalities?

JN: 1) ICT infrastructure development, 2) ICT Services, 3) ICT Applications.

The private sector will be involved directly or together with the government, via Private Public Partnerships (PPPs).

What will what ICT does, mean for Tanzania in terms of socio-economic development and in terms of helping put Tanzania on the world map?

JN: ICT will continue to play a big role in contributing to socio-economic development in Tanzania.

The new licensing allows Tanzania to depart from the licensing regime that focused on technology and service, to a licensing regime than is technology and service neutral, i.e. from a vertical licensing framework to a lateral licensing regime.

This provides a major change in terms of service provision and availability.

This implies that operators both local and foreign can offer any service using any technology.{xtypo_quote_right} [The new licensing] implies that operators both local and foreign can offer any service using any technology.{/xtypo_quote_right}

An investor can have a license of putting equipment which is to be leased and a service provider can provide the services using somebody else’s equipment unhindered and, therefore, more services will be available at the relevant quality and competitive prices.

More of value added services and improved/modernized basic services will be provided to consumers.

What are Tanzania’s unique selling points in term of FDI destination?

JN: Tanzania has several selling points:

1. Political stability; Tanzania is democratic and is now in its fourth phase of government since attaining independence in 1961.

2. Tanzania is strategically positioned, bordering eight countries; Kenya, Uganda, Rwanda, Burundi, DRC, Zambia, Malawi and Mozambique. ICT infrastructure development in Tanzania inevitably serves all of these eight neighbours.

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