BMI View: The Tanzanian mobile market rebounded in 2015, as its 2013 performance was negatively impacted by s im registration and removal of inactive accounts. Given that penetration is relatively low, there is still room for significant growth. Viettel 's entry into the market scheduled for October 2015, with a focus on rural areas will drive growth and competition further. Current operators scramble to match the new entrant, they look to differentiate themselves with better services. MFS (mobile financial services) will be one of these , as Tanzania becomes the first fully interoperable country. Mobile data will continue to grow through 3G and 4G networks. The fixed broadband market will see growth, especially as the TTCL long - term investments begin to bear fruit and the country benefits from TTCL's advanced nation-wide fibre optic network supported by data centres, three active satellites and two soon to be commissioned satellites.
The mobile sector grew 16.1% in 2014, compared to growth of 0.8% in 2013 following the discounting of inactive subscriptions and a 1.1% growth in Q313.
Despite increased usage, both in terms of voice and data, ARPU continues to decline through strong competition, which will be exacerbated by Viettel's market entry
MFS users have continued to rise Tanzania has become the first country to offer interoperability across all MFS platforms
The fixed-line market continues to contract, declining by 8.3% year-on-year (y-o-y) because of a lack of investment and fixed-to-mobile substitution
Tanzania ranked 16th with a score of 39.9, above the regional average of 39, on the BMI telecoms Risk/Reward Index (RRI) for Sub-Saharan Africa in Q315, out of 40 countries. It moved up two places in this quarter's update, thanks to an improvement in its country risks score, with all other metrics remaining unchanged. This improvement is due to Tanzania being a net oil importer, and it benefits from the lower price of the commodity, with potential savings boosting private consumption across many sectors, including telecoms. Despite a low penetration rate and stronger growth in 2014, its industry rewards score remains low, because of the continuous decline of ARPU despite increased usage.
Key Trends And Developments
Viettel is scheduled to enter the market in October 2015 with a strong emphasis on low costs and a focus on rural areas.
TTCL network infrastructure has expanded significantly as the operator now claims broadband internet offering 15Mbps speeds to businesses and homes anywhere in the country, claiming that its overall investments in excess of USD1bn are beginning to pave the way for a higher level of national and international connectivity. TTCL's investment worth over USD1.2bn has active satellites, a national fibre optic network and data centers supporting advanced broadband technology uptake nationwide.
Zantel's parent company, Etisalat, is in advanced talks with Millicom to sell its 85% stake in the Zanzibar based company but the deal is subject to further negotiations and regulatory approval.
Vodacom's new Managing Director for Tanzania has reaffirmed Vodacom's commitment to the development of rural Tanzanian mobile infrastructure as the incumbent gears up for fierce competition with Viettel.
In January 2015, Airtel finally divested its 35% stake in TTCL allowing for a renationalisation of TTCL. Furthermore, TTCL and Huawei Technologies agreed upon a USD182mn contract to expand TTCL mobile and fixed telecommunications network infrastructure.
UCSAF contracts will continue to dominate TTCL priorities and connect 400 villages with more than 500,000 inhabitants in the years to come.
|Broadband Uptake In Tanzania|
|TTCL Investments Will Yield Dividend|
|f = BMI forecast. Source: BMI|