africa capital markets communications M&A Tanzania telecom

Tanzania raises $20 million from maiden wireless spectrum auction

Tanzania has raised $20 million from a local subsidiary of South Africa’s Vodacom Group and another telecoms firm in the country’s first broadband spectrum auction that will help operators meet growing demand for high-speed networks.

Like elsewhere on the continent, mobile phone use has surged in the East African nation over the past decade, driven by the launch of cheaper smartphones and data services.

Market leader Vodacom Tanzania and a newcomer in Tanzania’s fast-growing communications sector, Azam Telecom (T) Limited, were picked as winners of the spectrum auction in the 700 MHz band.

“Vodacom Tanzania Plc acquired 2 x 10 MHz for a total price of $10.005 million and Azam Telecom (T) Ltd acquired 2 x 10 MHz for a total price of $10 million. The total auction proceeds is $20.005 million,” the state-run Tanzania Communications Regulatory Authority (TCRA) said in a statement on Saturday.

Around 19 million internet users in Tanzania accessed the world wide web last year through their mobile phones, up from 18 million in 2016, according to data from TCRA.

Internet penetration in the nation of around 52 million people ticked up to 45 percent in 2017 from 40 percent a year before, according to the regulator.

Tanzania had 40.08 million mobile phone subscribers last year, slightly down from 40.17 million a year earlier.

The regulator said Vodacom and Azam were given conditions after being awarded the new spectrum to ensure their mobile broadband services reach 60 percent of the population by 2021, rising to 90 percent by 2024.

Vodacom Tanzania said last month it plans to use the 700 MHz spectrum to roll out fourth generation (4G) services to more towns and cities in the country.

The Tanzanian government is seeking to generate more revenue from the telecoms sector by enforcing mandatory listing rules, hiking taxes on mobile money transfers and tightening monitoring of companies.

President John Magufuli sacked the head of the telecoms regulator in 2016, saying the watchdog failed to monitor the industry, resulting in the loss of potential tax revenues of over $180 million a year since 2013.

Prosecutors charged chief executives of telecoms operators Halotel Tanzania, owned by Vietnam-based telecoms operator Viettel, and Zantel with fraud on June 6 as part of a crackdown against tax evasion in the sector. The executives were released after paying a fine.

Source: Reuters

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