SANDTON, South Africa-Tanzania has been described as one of the least-developed countries in the world per capita, yet only recently prominent local investors with international backing have described it as “Africa’s rising star.”
Taking advice that the country needs to make its business environment more friendly before it can reap any gains, the government has embarked on a policy of privatizing various sectors to create an environment conducive to growth. One of the most important sectors it is determined to transform is telecommunications, with plans to privatize Tanzania Telecommunications Company Ltd. (TTCL).
Tanzania until recently has had one of the lowest telephone densities in Africa-seven telephones per 1,000 people, according to 1998 data. Most of the telephones are located in urban areas.
“In the past, we struggled to provide telephone lines to homes and villages and multiple lines to businesses at an affordable cost and in acceptable time scales,” said Adolar B. Mapunda, managing director of TTCL. “The problems we faced included lack of exchange capacity, operating an old network and lack of affordable enabling technology to implement an accelerated penetration of tele-services.”
To overcome these hurdles, the government embarked on a four-year, US$250 million Telecommunications Restructuring Program (TRP) to rehabilitate and expand the network. It has set the ambitious national goal of increasing the teledensity to 6 percent by 2020. This would translate into a total of about 3 million telephone lines for an estimated population of about 56 million.
Cellular services have helped to bridge the gap in telecommunications and have contributed to economically providing a means of supplying services. Cellular has also introduced competition.
The cellular market
Mobitel, in which Millicom International Cellular has a 51-percent stake, began operating a Motorola TACS system in September 1994 and is aggressively expanding. The carrier had about 35,000 customers as of June.
Tritel, a joint venture between Technology Resources Industries (TRI) of Malaysia and VIP Engineering, launched its GSM 900 network in January 1996. Sources say the company is trying hard to expand, but is experiencing serious overload. As of June, Tritel had about 18,000 customers.
Both networks cover the coastal zone, including Dar es Salaam and the islands of Tanga and Zanzibar, and are currently expanding their networks to cover all major cities and tourist areas.
Three more players have entered the wireless arena: TTCL; African telecom operator ZanTel; and a consortium including South African cellular operator Vodacom, all with GSM licenses in either the 900 MHz or 1800 MHz bands.
Winning a license in Tanzania was a strategic coup for Vodacom, which has once again ventured into Africa after losing a bid in Botswana in 1997. The Tanzanian Telecommunications Commission awarded Vodacom the license in mid-July after a short tender issued in early 1999. The 15-year license is worth more than R500 million (US$83 million). Vodacom partnered with Tanzanian company PlaneTel Communication Ltd. and holds 50 percent of the consortium.
WLL deployments
Wireless local loop (WLL) systems are being deployed by operators in Tanzania as a cost-effective way to reach geographically dispersed areas. Several WLL trials have been launched, including technologies such as DECT and PHS, but their success rates are still being measured.
“In general, available WLL technologies are still at (the) developmental stage,” said Zaipuna O. Yonah, personal assistant to TTCL’s managing director. “The problem is that the conducting of field trials, which is necessary, increases the time before roll out, cost of (the) system and cost relating to training.”
TTCL has deployed two WLL field trials, in cooperation with vendors, involving 100 subscribers total in Tanzania.
The first WLL test in 1996 was in Zanzibar and used Motorola’s Narrowband AMPS (NAMPS) system at a cost of about US$550,000. The field trial lasted three months and operated efficiently, so TTCL plans to permanently use the system.
Then in 1997, TTCL conducted the second WLL trial system with Mitsubishi in Dar es Salaam (Masasani) using NEC’s PHS-based Digital Cordless Telephone System (DCTS) at 2 GHz. This microwave-based WLL system requires a line of sight for best performance and has limited coverage when compared with the one in Zanzibar.
According to Yonah, the results from this trial were unsatisfactory because constant signal degradation due to tree growth and mushrooming buildings necessitated constant reinstallation of subscriber antennas to obtain a clean line of sight. Power blackouts frustrated some customers, who then wanted to return to wireline service. Furthermore, WLL connections failed to provide continuous connection to the Internet.
“The other serious problem is the absence of market standardization, which causes lack of compatibility of WLL systems and interfaces between systems from different manufacturers,” said Yonah. “Manufacturers need to be advised to adopt the WLL open standards.”
In its effort to modernize, TTCL is implementing an even larger commercial WLL project, called IDA 2. Construction of the network, funded by the World Bank’s International Development Agency, is under way and is scheduled to be launched in December. The technology will be based on the DCTS field trial in Dar es Salaam. The US$35 million project will provide telecom services to the northern tourist corridor (Arusha/Kilimnajaro/Mara) and other areas covered by transmission systems provided under a 140 Megabits per second (Mbps) digital backbone microwave system.
This WLL system is expected to add a capacity of 54,000 subscribers and is the first time the Japanese PHS-based WLL system has been deployed in Africa on such a large scale.
