82.5bn/- deal to transform telecom infrastructure

TANZANIA: IN a significant milestone for the telecommunications industry, the government has signed a crucial deed of settlement agreement with major telecom operators on Monday worth 50bn/-, as payment for the usage of the infrastructure since its construction.

The telecom operators equally committed to investing 32.5bn/-, in further infrastructure development.

The signing ceremony in Dar es Salaam yesterday, marked the formalisation of the agreement between the Ministry of Information, Communications, and Information Technology and the Consortium of Telco Operators, which includes Airtel Tanzania, Honora Tanzania (Tigo) and Vodacom Tanzania.

Information, Communication and Information Technology Minister, Nape Nnauye expressed gratitude for the finalisation of the momentous occasion.

Mr Nape underlined the importance of the event, which involved the signing of two key documents; the Deed of Settlement and the Addendum of Memorandum of Agreement between the Government and the Telecom Operators Consortium.

In his speech, Minister Nape extended his appreciation to the government under President Dr Samia Suluhu Hassan, for her unwavering commitment to advancing the Information and Communication Technology (ICT) sector.

He emphasised the government’s commitment to ensuring that ICT becomes an enabler for economic growth in the country.

The minister went on to commend Permanent Secretary in the President’s Office, Regional Administration and Local Government (PO-RALG) Mr Adolf Ndunguru and Chairman of the government negotiating team, for his effective leadership in facilitating the successful conclusion of negotiations, acknowledging the contributions of all team members and government experts.

Minister Nape also expressed his gratitude to Mr Mohammed Khamis Abdulla, the Permanent Secretary of the Ministry of Information, Communication, and Information Technology, for his exemplary coordination of the agreement.

Moreover, he congratulated the Consortium of Telco Operators, led by Mr Kamal Okba-Chief Executive of Honora Company (Tigo) for the way they have cooperated with the government and ensured the agreement is reached.

The historic agreement, initiated on October 4, 2011, between the government and the Consortium of Telco Operators, aimed to improve telecommunications infrastructure in the country. It focused on the construction of the Optic Fibre Cable Network in underserved areas where the national network did not reach. However, the implementation of the agreement encountered various challenges, leading to further negotiations between the parties involved.

During the signing ceremony, the Consortium agreed to provide a cash sum of USD 20 million over a period of five years, equivalent to approximately 50 billion, as payment for the usage of the infrastructure since its construction. Additionally, they committed to investing 13 million US dollars, (about 32.5bn/-), in further infrastructure development.

Another significant development during the ceremony was the signing of the Addendum of Memorandum of Agreement, which welcomed Vodacom Tanzania as a member of the Consortium, highlighting the collaboration between the private sector and the government in extending communication services to citizens and fostering economic growth.

These positive outcomes of the negotiations will enable the Consortium to hand over approximately 3,000 kilometres of communication infrastructure to the Government.

At the same time, the Consortium of Telco Operators will use part of the infrastructure to provide communication services for a specific time and cost to recover the investment they made earlier.

In addition, the infrastructure will be connected to the National ICT Broadband Backbone, thus increasing the scope of service provision of the National ICT Broadband Backbone.

Minister Nape underscored the government’s commitment to enhancing the ICT sector’s reach and quality of services.

He cited recent initiatives, such as the construction of 758 new communication towers to expand coverage to over eight million Tanzanians and the reduction of infrastructure installation costs to expedite the delivery of affordable and high-quality communication services.

Furthermore, the government has increased the national fibre optic network’s capacity from 200Gbps to 800Gbps, with plans to expand it to 2Tbps. The ongoing National Fibre Optic Network construction is expected to reach 99 out of 139 districts by March next year, with the goal of nationwide coverage by the end of 2024.

The minister emphasised that strengthening the ICT and communication sectors would drive economic development, promote business growth, and enhance digital adoption for societal development. The government’s objective is to ensure that 85 per cent of Tanzanians have access to high-speed internet by 2025.

Mr Nape provided directives for the effective implementation of the agreements, emphasising the need to expedite the Investment Agreement’s completion. He also called on the Ministry, the Tanzania Telecommunications Corporation (TTCL), and the Consortium to finalise the Indefesiable Right of Use (IRU) Agreement, ensuring that the infrastructure serves its intended purpose effectively and equitably.

The minister also urges all Telecommunications Service Providers to continue investing in infrastructure to reach end-users, the citizens, whilst reiterating the government’s commitment to creating a conducive environment for all service providers to contribute to the realisation of the digital Tanzania vision.

The signing ceremony was hailed as a momentous achievement, reflecting the dedication and professionalism of all parties involved, and it marked a significant step toward advancing Telecommunications Infrastructure in Tanzania.