The government has actively embraced the principles of competition and a private sector including foreign participation as a means of rapidly advancing economic and social development. Policy reforms have led to the telecom sector becoming among the most liberal in Africa. However, high import tariffs on telecoms equipment and taxes on telephone facilities by various authorities are still placing a burden on investors and operators.

Tanzania has two fixed-line operators (TTCL and Zantel) and eight operational mobile networks, with four additional players licensed under a new converged regulatory regime. With four major operators – Vodacom, Bharti Airtel (formerly Zain), Tigo and Zantel – mobile penetration is approaching 70%, with annual subscriber growth of more than 20%. In recent years a price war among these players has adversely affected the smaller operators, which have suffered from customer churn.

The new converged licensing regime has brought a large number of new players into the market. The liberalisation of voice over internet protocol (VoIP) telephony as well as the introduction of third and fourth generation (3G, 4G) mobile services and wireless broadband networks is boosting the internet sector which has been hampered by the low level of development of the traditional fixed-line network.

Following the launch of 3G mobile broadband services, the mobile networks are becoming the country’s leading internet service providers on the back of their extensive national infrastructure and existing subscriber bases in the voice market. Operators are hoping for revenue growth in the mobile data services market, given that the voice market is almost entirely prepaid and voice ARPU continues to fall. To this end they have invested in network upgrades, with both Vodacom and Smile Communications developing services based on Long-term Evolution (LTE) technology. A fast developing source of revenue is from mobile money transfer and m-banking services. In mid-2013 Bharti Airtel estimated that in Tanzania over 10% of GDP is transacted through mobile commerce.

In March 2013 the regulator reduced interconnection rates by 70%. Combined with a stringent registration policy, requiring new customers to have a physical ID, the reduced rates dampened growth in the number of mobile subscribers for some operators.

The landing of the first fibre optic international submarine cables in the country in recent years has revolutionised the market which up to that point completely depended on expensive satellite connections. In parallel, the government has switched on the first phase of a national fibre backbone network to connect population centres around the country. However, the cost of international internet bandwidth has so far not come down by as much and not as quickly as expected.

Estimated market penetration rates in Tanzania’s telecoms sector – 2015 (e)

Market	Penetration rate
Mobile	75%
Fixed	0.3%
Internet	26%

(Source: BuddeComm based on various sources)

Key developments:

• Zantel acquired by Millicom;
• Bharti Airtel cancels sale of mobile tower assets in Tanzania;
• Smile Communications contracts Ericsson to manage LTE infrastructure;
• Government signs MoU for final phase of the national backbone network;
• Phase 2B USF contracts awarded;
• Government agrees to buy back a 35% stake in TTCL from Bharti Airtel, for TZS14.6 billion;
• Millicom acquires Etisalat’s 85% stake in Zantel;
• Tigo and Vodacom launch Africa’s first m-money interoperability scheme;
• Zantel extends 3G services to mainland Tanzania;
• Viettel awarded 3G licence, expected to launch services in mid-2015;
• AzamTV reports 34,000 satellite TV subscribers within three months of launch;
• Low ARPU encouraging mobile operators to develop mobile data and commerce services;
• Regulator sets voice interconnection rates to 2017;
• Government allocates TZS17.5 billion ($10.8 million) to improve rural telecom infrastructure;
• Smile Communications trials VoLTE services;
• Government reviews ICT policy, considers measures to tackle cybercrime;
• Tigo integrates M-Pesa service with 17 major banks;
• Airtel, Zantel and Tigo make m-money schemes interoperable;
• TTCL opens a new microwave link connecting Dar es Salaam and Zanzibar, doubling data capacity;
• Telecommunication Traffic Monitoring System delivering about $1 million in incoming international call taxes monthly;
• Report update includes regulator’s market data to December 2014, operator data to March 2015, recent market developments.

Companies mentioned in this report:

Tanzania Telecommunications Company (TTCL); Zanzibar Telecommunications Corporation (Zantel); Vodacom Tanzania; Bharti Airtel (Zain); Millicom (Tigo); Benson Informatics Limited (BOL); Sasatel (Dovetel); Africa Online; Raha.com; Tele2; Alink; SatCom Networks; SimbaNet; Afsat; Cats-Net.

Table of Contents

• 1. Executive summary
• 2. Key statistics
• 3. Country overview
• 4. Telecommunications market
  • 4.1 Market analysis
• 5. Regulatory environment
• 5.1 Regulatory authority
  • 5.1.1 TCRA
• 5.2 National Telecommunications Policy 1997
• 5.3 National ICT Policy 2003
• 5.4 Regulatory overhaul 2005
• 5.5 Electronic and Postal Communication Act 2010
• 5.6 Telecom sector liberalisation
• 5.6.1 Converged licensing framework (CLF) since 2005
• 5.6.2 International gateways
• 5.7 Interconnection
• 5.8 Universal Service Fund
• 5.9 Foreign ownership restrictions
• 5.10 Registration of subscriber details
• 5.11 Mobile Number Portability (MNP)
• 5.12 Universal Communication Services Access Fund (UCSAF)
• 5.13 Voice over Internet Protocol (VoIP)
• 6.1 TTCL
  • 6.1.1 Privatisation and exclusivity period 2000-2005
  • 6.1.2 SaskTel management contract 2007-2009
  • 6.1.3 Future direction
  • 6.1.4 Ownership changes – 2015
• 6.2 Zantel
• 6.3 BOL
• 7.1 TTCL’s fixed-line network
• 7.2 Wireless local loop (WLL)
• 7.3 Private networks
• 7.4 National fibre backbone
• 8.1 Submarine fibre
• 8.2 Satellite
• 8.3 Terrestrial
• 9.1 Introduction and statistical overview
  • 9.1.1 Market analysis
  • 9.1.2 Broadband statistics
  • 9.1.3 Public internet access locations
  • 9.1.4 ISP market
  • 9.1.5 Tanzania Internet Exchange (TIX, AIXP)
  • 9.1.6 ccTLD management
• 9.2 Hybrid Fibre Coax (HFC) networks
• 9.3 Digital Subscriber Line (DSL) Networks
• 9.4 Other fixed-line broadband services
• 9.4.1 EV-DO
• 9.4.2 Fixed wireless (WiMAX, WiBro, Wi-Fi)
• 9.4.3 Satellite broadband
• 10.1 E-health
• 10.2 E-learning
• 10.3 Facebook
• 11.1 Digital TV developments
• 12.1 Market analysis
  • 12.1.1 Mobile statistics
  • 12.1.2 Mobile data services
  • 12.1.3 Mobile broadband statistics
  • 12.1.4 Tower infrastructure
• 13.1 Notes on scenario forecasts
• 13.2 Regulatory issues
  • 13.2.1 Mobile Number Portability (MNP)
  • 13.2.2 Tariffs
  • 13.2.3 International roaming
  • 13.2.4 Mobile Termination Rates (MTRs)
• 13.3 Mobile infrastructure
• 13.3.1 Digital networks
• 13.4.1 Mobile satellite services
• 13.5.1 TTCL
• 13.5.2 Vodacom Tanzania
• 13.5.3 Bharti Airtel (formerly Zain, Celtel)
• 13.5.4 Millicom Tanzania (Mobitel, Tigo)
• 13.5.5 Zanzibar Telecommunication (Zantel)
• 13.5.6 Viettel
• 13.6.1 Money transfer, m-banking
• 13.6.2 Mobile TV
• 13.4 Other infrastructure developments
• 13.5 Major mobile operators
• 13.6 Mobile content and applications
• 6. Fixed network operators
• 7. Telecommunications infrastructure
• 8. International infrastructure