Policy reforms have led to telecom sector becoming liberal in Africa

The day had previously been known as World Telecommunication Day to commemorate the founding of the International Telecommunication Union on 17 May 1865. It was instituted by the Plenipotentiary Conference in Malaga-Torremolinos in 1973.

The main objective of the day is to raise global awareness of societal changes brought about by the Internet and new technologies. It also aims to help reduce the digital divide.

In November 2005, the World Summit on the Information Society called upon the UN General Assembly to declare 17 May as World Information Society Day to focus on the importance of ICT and the wide range of issues related to the information society raised by WSIS.

In Tanzania’s economy has been showing solid growth rates of between 5 per cent and 8 per cent every year since 2000, despite the global economic crisis which has affected many economies since 2008.

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 per cent, with annual subscriber growth of more than 20 per cent. 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 per cent of GDP is transacted through mobile commerce.

In March 2013 the regulator reduced interconnection rates by 70 per cent. 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.