Vodacom Tanzania is set to spend Sh 200 billion ($100 million) on a rural expansion scheme in order to harness the market potential in remote areas and increase its mobile money (M-Pesa) subscriber base by at least 25 percent this year.
The company is Tanzania’s biggest mobile operator and has a 37 percent share of the country’s mobile market. According to the International Telecommunication Union, Tanzania has 56 mobile phone subscribers per 100 inhabitants, lower than 73 in Nigeria and 146 in South Africa.
A study of the country’s demographic profile shows that some 70 percent of the overall population live in rural areas. In order to achieve its desired target, Vodacom Tanzania will work with its competitors to connect more rural areas held back by a lack of electricity and roads.
Unfortunately, because of the infrastructure gaps in its operating environment, the network operator would have to connect sites to diesel-fired generators if it will successfully grow its current market share.
“It is not economically viable for a single operator to roll-out to these uncovered areas. Tanzania’s lack of power infrastructure has a huge impact on the investment we require,” commented Georgia Mutagahywa, Head of Corporate Affairs at Vodacom Tanzania.
Vodacom Tanzania also seeks to secure additional spectrum for expanded data coverage through its 3G broadband platform; for this reason, it has suspended the roll-out of faster 4G LTE data services. “Roll-out will commence once Vodacom acquires spectrum. We are modernizing our core and transport network in preparation for full LTE services in readiness for spectrum availability,” she added.
Tanzania is an East African country with a reputation for having vast wilderness areas and an economy largely driven by agriculture. Aiming to raise its economy to middle-income status by 2025, the country is executing a $25.2 billion development plan which entails the construction of power plants, and the expansion and construction of new ports and roads.
The nation is also Africa’s fifth-largest gold producer and is estimated to have a 50.5 trillion cubic feet of natural gas reserves.
By Emmanuel Iruobe