19th annual research workshop mobile phones and micro and small enterprises (mse) performance and transformation in dodoma, tanzania by Dr. V. Venkatakrishnan

SECTION III: MOBILE PHONE SERVICES IN TANZANIA

There is a significant growth in the use of mobile phones in Tanzania in the last few years. The number of mobile subscribers increased from 126,646 in 2000 to 17.8 millions in March 2010 (Tanzania Communications Regulatory Authority, 2010 cited by Lwoga, 2010:4). The data obtained from the Tanzania Communications Regulatory Authority (TCRA) show that at the end of 2013, the number of mobile phones in Tanzania has stood at 27,442,823.

A study by Gilwald and Stork in 2008 indicated that Kenyans were spending on an average nearly 17% of their individual income on mobile communication, followed closely by Tanzania (15.4%) and Senegal (14.2%) and they considered that the high percentage of individual income spent on mobile is a reflection of the continued high cost of services in Africa. It is also claimed by them that the cost of these services were prohibitively high for majority of the population (Gilwald and Stork, 2008: 14-5). Though the cost of mobile phone services provided by the dominant provider was said to be relatively very high in Tanzania compared to many other countries in Africa, the number of mobile phone subscribers is increasing substantially probably due to mobile phones’ ease of use. Considering the fact that the computers and internet access are still relatively more expensive than mobile handsets, the mobile phone usage is likely to increase manifolds compared to other ICTs. The PHDR 2011 of Tanzania has also stated that ‘Mobile telephony has enormous potential for development, for example, by facilitating greater access to market and health information as well as financial services’ (URT, 2012a: 143).
The figure 1 shows the growth in the mobile lines growth in Tanzania from 1998 to 2013. It may be observed that in 1998, Tanzania had much less than one million mobile connections. As on 2013, it had achieved a growth of more than 27 million mobile lines covering almost all parts of the country. The years 2008, 2009 and 2011 witnessed substantial growth compared to many other years. Nevertheless, it is noticed that the growth in mobile lines since 2011 has not been significant compared to the previous years. It also can be claimed that the mobile phones sector has almost stagnated and reached a plateau in post-2011. Drastic efforts are needed from the leading service providers and the regulators to furthering these achievements.


Figure 1: Mobile Phone Connections growth in Tanzania 1998-2013

Source: Data obtained from Tanzania Communications Regulatory Authority

Teledensity of Tanzania

Teledensity is calculated as the number of telephone connections for every hundred individuals living in that area. Tanzania’s Teledensity at the turn of the 20^th century was very low. It was mostly depending on the landline phone connections provided by the monopolistic public sector provider. Onset of liberalization of the telecom sector has resulted in the leapfrogging in the Teledensity considerably due to the mobile phone subscribers’ growth. The Teledensity which was 10% in 2005 has reached 61% in the year 2013. The years 2008 (32%), 2009 (43%), 2010 (50%) and 2011 (59%) have witnessed significant milestones in the telecommunications history of Tanzania. While the numbers of mobile subscribers have increased, the landline connections have been experiencing a steady decline. Nonetheless, the period from 2011 to 2013 has seen very limited increase in the Teledensity. Further, there are also indications that many individuals have been accessing the services provided by different operators simultaneously due to very high interconnectivity charges as the off-net charges of connecting from one service provider to another service provider is considerably high. Thus, it is possible to arrive at a lower Teledensity if the usage of more than one SIM is taken into account. The figure 2 displays the trend in the growth of Teledensity in Tanzania from 2005 to 2013.

Figure 2: Teledensity of Tanzania 2005-2013 (mobiles per 100 persons)

Source: Data obtained from Tanzania Communications Regulatory Authority

Market share of mobile operators in Tanzania

Vodacom was said to have pioneered many new features in Tanzania. It was the first Tanzanian carrier to launch video call, video messaging and 3G HSDPA USB Modem. As for January 11, 2008, Vodacom Tanzania was again the first and exclusive company to provide a free E-mail ID via a phone number (Furutuni, n.d: 5-6).

Vodacom was the leading mobile service provider in Tanzania as on Dec 2013 and it was closely followed by Airtel. The gap between these two operators is narrowing down since June 2012. Tigo was very close to Airtel in their share till June 2010. Since then the share of Airtel has increased and the gaps between Airtel and Tigo have increased. The fourth largest mobile service provider, Zantel is just able to maintain its voice subscription base at 2,000,000. The Figure 3 provides the picture of voice subscriptions of these major telecom operators from Oct 2009 to Dec 2013.


Figure 3: Voice subscriptions of telecom operators in Tanzania: Oct 2009 to Dec 2013

Source: Data obtained from Tanzania Communications Regulatory Authority

Growth in the national traffic of on-net and off-net voice calls
The national traffic of on-net calls (calls made within the same service provider) has almost trebled in Oct-Dec 2013 compared to April-June 2010. On the other hand, the traffic of off-net calls (calls made from one service provider to another service provider) have been stagnant for a long period till March 2013. Since the quarter of April-June 2013, there has been a slow but steady growth in the off-net voice calls.


Figure 4: National traffic of on-net and off-net voice calls in Tanzania: April’10 to Dec’13 Source: Data obtained from Tanzania Communications Regulatory Authority