Ramadhan Chorogondo, 31, an industrious fish dealer, always nurses the headache caused by the ghost called time. First bother, he must monthly service a USD20, 000 bank loan that helped him secure motorized fishing boats.

The second anxiety is the harshest: How and when to know his nocturnal fishermen have netted profitable fish loads and when to advise transporters to collect them from his Indian Ocean landing site.

The headache about time essentially hinges on the nature of his products - perishable seafood. With lack of refrigerated vehicles to move fish heaps to hinterland markets, they must be ferried as soon as they leave seawaters. Nevertheless, as an entrepreneur, the logistics of managing time no longer slips through his hands, thanks to cordless communication linkages with his maritime fishing brigades, and his transport agents.

His cellphone has become a powerful management tool, able to keep his business rolling on, despite the obvious perils.

Walls come crushing
Chorogondo, as well as over 5.8 million other Tanzanians currently hooked to one of the five mobile phone companies, are hardly aware that they are benefiting from the fruits of 13-years process of liberalizing the country’s communication sector.

Up until 1993, state owned Tanzania Posts and Telecommunications Corporation (TPTC) held monopoly in the provision of communications and regulated the sector.

Zanzibar Telecommunications Company Limited (Zantel) enjoyed similar domination in the Isles. Though decision to restructure and liberalize communication sector came in 1993, in practice the actual process took off four years later, with the coming onto the picture of National Telecommunication Policy.

Pointedly, it seeks to "promote the liberalization and competition of the telecommunications sector and ensure reliable provision of these services to all economic sectors". The guidelines also set out for the sector’s institutional set-up by separating the roles of the government, operators and the regulator.

Likewise, it established sunset period of exclusivity to the erstwhile operators whilst leaving other services (mobile, data and paging) open to competition.

Basis for success
Government’s first plus was its decision to standardize regulatory framework. Two agencies, the former Tanzania Communication Commission (TCC) and Tanzania Broadcasting Commission (TBC) were merged to form Tanzania Communications Regulatory Authority (TCRA) three years ago.

TCRA Act No. 12 of 2003 categorically provides for, inter alia, the responsibility of promoting fair competition and economic efficiency, safeguard consumer interests, the promotion and monitoring of availability and quality of regulated services and their tariffs. It is also empowered to grant licences as well as enforcing their conditions.

In the same year, Tanzania National Information and Communication Technology (ICT) Policy was promulgated. Theophilus Mlaki, Information Director at Tanzania Commission for Science (COSTEC) says its aim was to establish an "overall policy environment to uniform standards and to promote the use of scarce telecom resources, including spectrum."

For the first time, Tanzania adopted a flexible policy instrument geared towards boosting private sector investment, with a broad array of steadfast, reasonably priced domestic and international telecommunications.

Growth market
Transparent liberal policy and fertile regulatory framework attracted investors in droves to exploit fresh business opportunities.

The first mobile phone company in Tanzania, Mobitel, was registered in 1994, deploying an analogue network, followed by Tritel, which installed Global System of Mobile communication (GSM) supplied by Siemens.

Yet, up to 1998, out of a population of about 30 million people, the two companies had amassed only 37,900 subscribers!

With only three players in the sector, competition was far from being effective. For instance, Mobitel used to charge both incoming and outgoing calls in foreign exchange (US Dollars), making their services look more of redundant luxury.

The ailing state owned Tanzania Telecommunication Company Limited (TTCL), due to its inefficient monopoly, enjoyed well over 70 percent market share, while the country’s tele-density was as low as 0.3 in 1998.

The real competition in the mobile phone industry in Tanzania came with Vodacom’s market debut in 1999. It deployed modern digital technology, linking up Tanzania with its network towers. With massive investment in rollout programmes in the first four years, Vodacom became the first telecom firm to book a million subscribers two years ago.

The latest entrance of Celtel International and Zantel has seen cut-throat competition over consumer tariffs, as well as expansion in the range of services provided to consumers. For instance, Vodacom’s subscribers, who incidentally happen to be customers to the pan-territorial CRDB Bank, can inquire about the status of their account balances through short messaging services (SMS), a value adding service.

Weird licensing reform
In February last year, TCRA approved a converged licensing framework, making it pioneer African country to reform licensing regime that way.

At a stakeholders meeting held in Dar es Salaam early October, TCRA Director General Professor John Nkoma said the new form of licensing would enable providers to offer any services they wish with the technology of their choice with one single license.

In response to the fertile regulatory climate, four more telecom companies applied and granted licenses, bring to ten total number of telecom companies operating in Tanzania.

Lawyers commended the move, saying it augurs well with the tenets of the rule of law. In 2001, as part of a divestiture strategy, TTCL was granted 4-year exclusivity contract for the provision of landline services, including monopoly over the international gateway.

The government had given itself a breathing space as it pursued partial privatization of its ailing TTCL, by streamlining operations to make it more viable and more responsive to industry needs.

TTCL’s exclusivity contract expired in 2005, and TCRA never renewed it. Instead, it introduced converged licensing system, which technically ends TTCL’s ungodly era of industry domination.

According to 2006/7 maiden trade and business guide edition, Corporate Tanzania, TCRA’s matchless licensing regime, eases market entry, by increasing competition and innovativeness while driving down prices.

All new entrants to the industry under the converged licensing regime are busy building advanced international access networks, linking Tanzania to the world using more efficient technologies as they compete on tariff margins.

Given the unique licensing advance, Marco Cargi, senior advisor for the Paris based Nortel Networks, predicts that was "essentially digital".

However, in several e-mail text exchanges, he said, analogue devices would still be functional by connecting them to special adapters.

The regulator’s policy flexibility, sensitivity to changing technologies and protection of consumers’ rights has won it accolades from researchers in communications utility regulations, like Dr. Chris Doyle of the UK-based Warwick University.

For similar reasons, TCRA was voted and declared best ICT regulator in Africa at the early May ICT Africa Investment Summit held in Kigali, Rwanda.

Multiple synergies

Tanzania’s communication policy and regulatory versatility makes it lucrative to both Foreign Direct Investment (FDIs) and domestic venture capital.

The Executive Director of Tanzania Investment Centre (TIC) Emmanuel ole Naiko considers this sector as the fastest growing one, next to mining.

Most recent testimony was provided by Celtel Tanzania. Traditionally, Celtel expansion in Africa has been supported by the International Finance Corporation (IFC), World Bank’s wing that lends to private sector. In June this year, however, Celtel secured USD70 million from a syndicate of eight banks, six local and two foreign banks.

In addition, Celtel Tanzania would access an additional USD 15 million in early 2007 through a roll-over facility to be provided by the lenders from the banking syndicate involved.

Although Cartel’s Managing Director Steve Torode commented the loan would be used "to drive the company’s expansion plans within Tanzania", it came as shock that in less that three months, the company launched "One Network" service in East Africa.

Unlike traditional roaming facilities, the service is unique in Africa in that it has enabled subscribers in East Africa (Tanzania, Kenya and Uganda) become one network by removing the barriers of home network. Now, subscribers across the region are using one SIM card for all their communications needs. With it, roaming goes by the territory.

Most recent pro-active regulatory intervention by TCRA was re-organization of Mobile Network Destinations Codes (MNDCs) and subscriber numbers, from six to seven digits. Old codes and numbers were allowed to co-exist, until end of last October.

Upon expiry of the deadline, TCRA boss Professor Nkoma said the new code system could accommodate up to 7-million subscribers, unlike the previous ones which only managed to hold 800,000.

Things to come in future
As a matter of policy, Tanzania’s future broadcasting services will all be digital. TCRA has provided a sunset period of between ten to fifteen years from last June for all TV and radio stations to go digital by replacing current analogue broadcasting gadgets.

The switchover to digital age would optimize use of "scarce spectrum" in view of Karen Peltz Strauss of KPS Consulting of Canada, because analogue techs tend to occupy more bandwidth for transmitting same amount of data.

Bandwidth (a range of frequencies used to transmit information such as picture and sound) is an economic resource. Unlike analogue systems, for digital television (DTV) broadcasters for instance, it is possible for the single bandwidth to accommodate more than one channel.

At the same time, it would solve the problems of noise and interference, now typical in analogues networks. This way, according to a consultative document released this year by TCRA, new distribution networks would be created whilst allowing more channels to be carried across fewer airwaves. In turn, this would lessen the apparent pressure on TCRA for allocating limited frequencies. Until June this year, Tanzania had 58 licensed television and radio stations, with more applications in the pipeline.

Although the swap over entails recapitalization on the part of media investors, Professor Nkoma has assured stakeholders that digital broadcasting would generate new enhanced services and additional programming, better picture and audio quality, data as well as interactive services.

Last stroke
This month, the parliament is expected to enact Universal Communications Access Service Act (2006). The Bill allows for the creation of Universal Communications Access Fund.

The purse would subsidize investment costs incurred by private operators wishing to serve rural and underserved areas.

In a way, the new Act would complement country’s earlier decision to go digital broadcasting by end of 2017. After this deadline, based on the new TCRA’s frequency distribution plan under digital technology, ex-analogue frequencies would have to be returned to TCRA.

In turn, the retired frequencies would be made available for rural communication and community radios which do not require satellite frequencies. This means, current owners of analogue based infrastructure will still enjoy the option of deploying them to underserved areas, with assured access to the subsidy kitty to be established under the Fund.

Last word

The main driving force behind the Information Age is technological change and innovation. Productivity, job creation, economic growth and export competitiveness are largely due to the deployment of new technologies.

Africa and in particular Tanzania’s international competitive position will be strengthened by ensuring that a robust competitive environment exists in the domestic communication market.

David Pringle, a spokesman for the GSM Association, was end of last month quoted by the Washington Post as saying cellphone usage in Africa is growing faster than in any other region. He rattled the growth as having jumped from 63 million users two years ago to about 152 million users today.

Policy and regulatory regimes should encourage the upgrading of current delivery systems as quickly as possible - particularly as the Internet is putting tremendous pressures on the capacity of existing facilities.

The strategic decision by TTCL and Zantel to become partners in the envisaged Eastern Africa Submarine Cable System (Eassy) project seems elegant, at best for now.

Source: IPP Media