Tanzania: Why Cost of Internet Access Is Relatively High in Tanzania

Mobile services have played an important role in the revival of the Tanzanian economy by increasing productivity and social development. However, growth has plateaued in recent years, thus calling for a review of the existing regulatory framework to achieve further incremental growth in the sector.

Between 2005 and 2015, the performance of Tanzania's mobile sector was the pride of the nation. Year-on-year subscriber increases were rapid, fuelled by increasing coverage and healthy competition in the market. Between 2006 and 2016, 17 million unique mobile subscribers were connected in Tanzania - a huge achievement. The sector was characterised by innovation, quality, and growth, and this generated a lot of excitement as subscribers expected more and more from the operators all the time.

A healthy regulatory framework was instrumental in the creation of that atmosphere. The government set the tone through its EPOCA laws, which were largely considered progressive. The industry regulator, TCRA, then under the leadership of Prof John Nkoma, was being acclaimed across the continent for its performance. And the tax regime was considered fair, making it possible for operators to earn healthy margins and continue to invest in new generations of technologies.

The government also invested in the National ICT Broadband (NICTBB), one of the best investments it has ever made, one which has the capability to unlock so much of its people's potential. NICTBB reduced replication of operators' infrastructures, ultimately reducing their operational costs and increasing their appetite for further investments.

Meanwhile, two dynamics had to be balanced. One, to increase digital inclusion. Two, to improve the sector's contribution to the nation's GDP, which left so much to be desired. Achieving these ends required a tricky balancing act, and it is at this point that things started to go awry.

Seeing all that money flowing around, especially with the explosions in mobile money and data services, the government thought that VAT alone was not enough, so it imposed 17.5 percent excise duty on all voice and internet services. Moreover, charges were imposed on blogging activities too - possibly with other political ideas in mind.

More From: Citizen

Don't Miss

AllAfrica publishes around 800 reports a day from more than 130 news organizations and over 500 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.