20 November 2012

Tanzania: Telecom Revolution Transforms Lives

TELECOMMUNICATION is one of the fastest growing sectors of the economy that has brought about rapid socio-economic transformation in rural and urban centres.

Like in other developing countries, in Tanzania, telecom technology is regarded as an important tool for accelerating poverty reduction by raising productivity, generating economic growth, creating jobs, facilitating learning, knowledge sharing and global information flows.

Apart from easing communications even with the outmost areas, for example, the access of financial services for many people who were once excluded by the formal monetary system are now included with the advent of mobile technology.

The revolution in mobile technology has also been a source of employment and income to majority of people engaging in money transactions, thus contributing significantly to efforts to end poverty.

However, the pace with which mobile technology changes has not been proportional with largely weak consumer purchasing power in the country -- where almost half of the population still lives on less than a dollar a day thus putting a looming ceiling over how high telecom executives can expect profits to climb.

For example, the Tanzania Communication Regulatory Authority (TCRA) official statistics show a declining expenditure on mobile usage that could partly be explained by the deteriorating purchasing power among the people.

According TCRA, the average expenditure on voice calls per individual declined to 15,543/- in the quarter under review compared to 19,641/- of the previous period. The average usage of voice calls per individual has declined by 17.79 per cent in the fourth quarter ending June this year but with many people opting to the use of short messages service (SMS).

Consequently, total revenues generated slightly declined to 435.58bn/- in the fourth quarter compared to 529.88bn/- of the previous period. Despite the slashed expenditure, the TCRA report shows that the voice telecom subscription increased to 28.02 million by June this year compared to 26.97 million of the previous quarter.

The number of on net sms to 1.32 billion at the fourth quarter from 1.23 billion representing an 8 per cent growth. Likewise, the off net sms 366.9 million from 324.8 million, equivalent to 13 per cent growth.

Among the telecom mobile firms, Tigo is leading in the national SMS shares by 59 per cent, followed by Vodacom 24 per cent, Airtel 10 per cent and Zantel 7 per cent. On international SMS shares, Airtel is at the top by 69 per cent, followed by Tigo 16 per cent, Vodacom by 12 per cent and Zantel by 3 per cent.

The total number of on-off net traffic mobile phone calls recorded a growth of 6 per cent, 5.17 billion during the quarter under review from 4.87 billion, compared to only 2.6 per cent of the preceding period. The third quarter saw a decline of the number of on net calls to 4.63 billion from 4.76 billion of the preceding period.

The national traffic operators market share in the quarter under review show that Vodacom is leading by 35 per cent, then Tigo by 34 per cent, Airtel 28 per cent and Zantel 2 per cent. On the international traffic operators market share Vodacom is at the top by 49 per cent, followed by Tigo 18 per cent, Airtel 16 per cent and Zantel 13 per cent.

According to the TCRA report, Zantel had the highest number of backlogs for unregistered SIM card of about 1,143,788, followed by Airtel 375,206, Tigo 103,993 and Vodacom 15,614 users. The rapid expansion of mobile phone usage in Tanzania has been triggered by a highly competitive market and service diversification, with the operators now providing different mobile phone services such as voice and message transmission, data services, paging as well as Internet services.

Mobile finance service is changing the ways of life for many by offering convenience, reach and most important financial inclusion for the previously off reach population. It is forecast that by 2016 there will be nearly 40 million mobile subscribers in the country, reflecting a penetration rate of 70 per cent and internet and broadband penetration will reach 29 per cent and 3.3 per cent respectively due to increasing access to wireless technologies.

According to the National Bureau of Statistics (NBS), the telecommunication activities recorded a growth rate of 15.2 per cent in the second quarter of 2012 compared to 16.6 per cent in the corresponding period last year.

Copyright © 2012 Tanzania Daily News. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.