Tanzania Telecommunications Report Q4 2010

BMI's latest update on Tanzania's telecommunications market contains revised forecast figures for the country's fixed-line telephony, internet user and broadband subscriber markets. This quarter also sees further revisions to our mobile subscriber growth forecast. Our new forecasts are based on new Q1 2010 data published by the country's telecoms regulator, the Tanzania Communications Regulatory Authority (TCRA). Our forecasts also incorporate data published by Tanzania's leading mobile network operators; including Vodacom Tanzania, part of South Africa's Vodacom Group, and Tigo, which is owned by Luxembourg's Millicom Cellular International.

Our newly revised fixed-line forecast for Tanzania envisages long-term steady growth, fuelled largely by the expansion of fixed-wireless services. Meanwhile, our new broadband subscriber forecast is based on an estimate of around 11,000 broadband subscribers at the end of 2009; this is equivalent to a penetration rate of just 0.03%. We also estimate that Tanzania had 676,000 internet users at the end of 2009, equivalent to a penetration rate of 1.6%. Over the next few years, we predict that the number of internet users and broadband subscribers will increase at a relatively robust rate. In the medium term, growth in the broadband sector will continue to be driven by the corporate sector, as well as by small businesses such as internet cafes. The inauguration of international cable systems such as SEACOM and EASSy is seen as positive news for the broadband sector; the increased bandwidth that these cable systems will introduce should ultimately lead to lower prices for internet customers.

Our new mobile subscriber forecast for Tanzania is based on an estimate of 17.276mn mobile customers at the end of the year; this is equivalent to a penetration rate of 40.6%. In addition to forecasting strong growth of 31% in 2010, we predict that Tanzania's mobile market will expand at an annual average growth rate of 20% over the next five years. In addition to the introduction of compulsory SIM registration in July, recent developments of note within the mobile market include the news that Tanzania's regulator, the TCRA, licensed five additional mobile phone companies in March 2010. The latest licence issuance brings the number of companies that are licensed to provide cellular services to 12. Although it is still far from certain that all five of these companies will proceed to offer commercial mobile services, the arrival of new competition could help to further reduce telecoms tariffs. Meanwhile, at the time of writing, it looked as though Tanzania's government was preparing to lock horns with India's Bharti Airtel over the latter's recent acquisition of Zain Tanzania. Although Bharti is understood to be interested in acquiring the state's 40% stake, it appears that the government plans to hold onto its interest.

This quarter sees the introduction of new terminology to describe the different categories surveyed within BMI's Telecoms Business Environment Ratings. BMI undertook this change in order to standardise the Business Environment Ratings across different industry sectors. Tanzania sits in 5th position in our latest set of business ratings for sub-Saharan Africa.