Nearly 7 million Tanzanians hooked to the cell-phone bug

MORE than 6.7 million Tanzanians and counting have so far become connected to mobile phone services as the country’s telecoms industry continues to record impressive growth.

Latest figures indicate that the second quarter of 2007 saw no change in the ranking of the four major mobile phone service providers in the country, in terms of customer numbers. Vodacom remains the dominant player followed by Celtel, Millicom (tiGO) and Zanzibar Telecom (Zantel).

The total customer base in Tanzania increased by 2.3 million to reach 6.7 million at the end of the second quarter of the year, with penetration at 17.6 per cent which is a similar level to that of neighbouring Zambia and Mozambique.

According to leading wireless telecoms online publisher Cellular-News, in total there were 0.58 million net additions in the quarter, an increase on the previous two quarters although slightly short of Q2 2006’s 0.59 million.

In proportionate terms, however, the market is slowing as it becomes more established, with customer growth at 51 per cent in the twelve months to the end of Q2 2007, compared to 62 per cent in the 2006 calendar year and 75 per cent in the year to the end of June 2006.

The Cellular-News report says while the Tanzanian market remains highly stratified, this does not imply that there has been no movement whatsoever.

Vodacom still lays claim to over half of the country’s customers with a total of 3.5 million and a market share of 51.6 per cent, a loss of 1.3pp in the quarter, but up 0.2pp on an annual basis.

Its nearest rival, Celtel, has seen consistent quarterly gains in market share over the past year and finished Q2 of 2007 with 28.5 per cent, up 1.2pp quarterly and 2.3pp yearly.

Moreover, Celtel recorded its best-ever quarter for net additions with 234,000, the highest figure in the market for the quarter and the first time it has outperformed Vodacom for over three years.

’’Although it still has a long way to go before it starts challenging the market leader, Celtel’s growth trend over the past year is undoubtedly encouraging for the company,’’ said the report.

The closest battle in the market is between the two smallest operators, Millicom (tiGO) and Zanzibar Telecom (Zantel).

Originally a regional operator (for Zanzibar only), Zantel was granted a national licence in 2005 and has not looked back since. Its total customer base now stands at 0.48 million compared to Millicom’s 0.86 million, but its net additions for the year were 236,000, over double the 104,000 recorded by Millicom.

In terms of market share, Zantel has gained 1.7pp yearly to reach 7.2 per cent, while Millicom has lost 4.2pp and stood at 12.7 per cent at the end of Q2 of 2007.

Zantel has been the market leader in terms of proportionate customer growth for all but one of the past six quarters, the exception being Q2 of 2006 when Millicom put in an outstanding performance of 242,000 net additions.

However, this performance by Millicom was somewhat undermined by its loss of 129,000 customers two quarters later.

The chart demonstrates the volatility of Millicom, in marked contrast to the relative stability of the other three operators. It also indicates that the fourth- and second-placed operators (Zantel and Celtel) are outpacing the operators placed above them (tiGO and Vodacom) in terms of proportionate customer growth.

Recently, the state-owned fixed telephone line operator TTCL has also entered the fray by rolling out its own mobile phone services.

Market watchers say if this trend continues, it could in the medium to long-term bring about much more competitiveness amongst the operators in Tanzania.