Post date: Feb 23, 2012 2:53:44 PM
DAR ES SALAAM, TANZANIA (FEBRUARY 17, 2012) (REUTERS) - Vodacom Tanzania, part of South Africa's Vodacom Group, has said it boosted total users by a third last year and will spend about 94 million US dollars over the next year and a half to expand network and data services.
Vodacom Tanzania, part of South Africa's Vodacom Group, said it had added one-third of its total users last year and would spend about 94 million US dollars over the next one-and-a-half years to expand its data service.
Rene Meza, Vodacom Tanzania's managing director, said the increase in users came from new customers joining its M-Pesa money transfer service, which has an 85 percent share of the total mobile commerce transactions in the country. He said the firm now had more than 12 million users.
M-Pesa, through which users can buy airtime and make payments, has been popularised in neighbouring Kenya by its biggest mobile operator, Safaricom.
Meza told Reuters in an interview that Vodacom Tanzania had invested over 1 trillion shillings over the past decade to make it the biggest mobile operator in the country.
Meza, who joined the company in September from rival Bharti Airtel's Kenyan unit, said the company's next main focus was to expand its mobile internet service.
"[We have] very ambitious plans for expansion. The next probably 12 to 18 months will see us spending over 150 billion shillings expanding our coverage, expanding our infrastructure," Meza said.
"If you look at where the neighboring country Kenya is and where Tanzania is, there is massive room for growth. The mobile internet penetration in Tanzania is no more than 3 or 4 percent as compared to the 15 percent in neighboring country Kenya, so there is tremendous opportunity for growth," he added.
Meza said just a third of the 42 million people in east Africa's second largest economy were connected to mobile phones.
Vodacom Tanzania's parent company, Vodacom, a unit of Britain's Vodafone, reported a 12 percent jump in earnings in the third-quarter on February 8, buoyed partly by its mobile data, expected to have huge growth potential in Africa.
Communications is the fastest-growing sector in Tanzania, accounting for 20 percent of gross domestic product. Other major players in Tanzania's mobile phone industry are Bharti Airtel, Millicom's subsidiary Tigo Tanzania and Zantel.
Meza said inflation and exchange rate fluctuations were pushing up costs. He said the company paid its frequency fees to the mobile sector regulator in U.S. dollars while it charged users in shillings.
Tanzania's year-on-year inflation rate eased marginally to 19.7 percent in January, but is expected to remain in double digits in the coming months due to high food and fuel prices.
Meza said he does not expect further reduction of mobile phone tariffs in the country after a fierce price war in the past few years stifled new investments in the sector.