VODACOM’S market share has gone down to by six per cent to 39 per cent last year mostly on account of Halotel entrance into the market.
The Tanzania gaint telco, though, continued to be a market leader despite the drop from 45 per cent to 39 per cent last year. Orbit Securities said in a statement ‘Financial Update for Vodacom for Period ending March’ that the telco being the largest market player with a net cash buffer of 390.82bn/- was well positioned to grow and exploit the potential seen in the industry.
“Vodacom is positioned to grow parallel with the sector and exploit the potential seen in the industry,” Orbit statement said.
The Tanzania telecom industry has substantially grown over the years, recording a penetration rate of 81 per cent and 43 per cent for telecom and internet services at end of last year from 61 per cent and 21 percent in 2013 respectively.
The total number of subscriptions, Orbit analysis showed, increased from 27.6 million in 2013 to 43.6 million in 2018. Internet subscribers increased from 9.3 million to 23.14 million during the same period.
The number of mobile money users also grew from 17.6 million in 2015 to 23.4 million in 2018. “Although the industry is highly regulated, growth potential is still very significant considering the population growth of Tanzania estimated at 3.0 per cent per year.
According to National Bureau of Statistics (NBS) approximately 43 per cent of the 55 million Tanzanians are under 14 years old.
During the year ending March, Vodacom’s capital expenditure was 171.4bn/- up by 7.3 per cent annually and equivalent to 16.7 per cent of total revenue for the year.
“The investments included the acquisition of the 700MHz spectrum to increase 4G coverage across the country and improve customer experience,” the statement said.
M-Pesa deposits at the end of March stood at 378bn/- larger than a majority of domestic commercial banks. “M-Pesa also holds so much potential especially with the authorities’ prioritizing on financial inclusion,” Orbit said.
The mobile money platform stands as the most efficient tool to reach a vast area of the country, especially in remote areas with low income earners.
“A downside risk arises from the regulatory side, as the sector is heavily regulated and network providers are closely monitored due to the nature of their service being of great interest to national security,” the statement said.
The downward glide of Mobile Termination Rates (MTRs) to 2/- by January 2022 is expected to affect mobile service revenue while increased number of subscribers is expected to offset the loss.