Cost of smartphones continues the digital divide in Tanzania

Onkokame Mothobi · Goodiel Charles Moshi
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Policy Brief 4, 2017: Tanzania

Tanzania hosts the second largest telecommunications market in east Africa after Kenya. In 2005, the Tanzania Communications Regulatory Authority (TCRA) introduced a converged licensing framework (CLF), which provides separate licences for infrastructure and service industries. In 2012, Tanzania committed to building a single national open access backbone to reduce the duplication of networks and facilities and drive down wholesale costs to ultimately reduce retail prices. The plan seems to have worked: the low wholesale prices appear to have been passed on to end-users. In 2013, the Tanzania Telecommunication Company Ltd (TTCL) reduced its wholesale data tariffs. The price of 1mbps for wholesale customers dropped from USD900 to USD450 per month. The fall in price was complemented by increased bandwidth speed. Between Q1 2016 and Q2 2017, 1the reduced cost of wholesale bandwidth from the national carrier network seems to have passed through to consumers with the price of data dropping from TSH 12 800 in Q2 2016 to TSH 5 000 in Q2 2017. However, prices have been falling even faster in other countries, pushing Tanzania from the top of RIA’s Africa Mobile Pricing (RAMP) 1GB Index in Q2 2016 to 4th position out of 49 African countries one year later. The key to Tanzania being among the top countries in the 1GB basket comparison is undoubtedly the competitiveness of the market, which hosts seven players.

Highlights:

1. Tanzania is ranked fourth among 49 African countries when comparing the cheapest 1GB of prepaid mobile data, yet the Internet penetration rate remains low at 30%.

2. A nationally representative ICT Survey recently completed by Research ICT Africa (RIA) finds 43% of Tanzanian population does not own a mobile phone.

3. The Survey also identifies the cost of smartphone devices to be a major inhibiting factor on Internet take up.

4. Voice is still king with 80% of communication expenditure in Tanzania being spent on voice/SMS services.

Suggested citation

Mothobi, O., & Moshi, G. C. (2017). Cost of smartphones continues the digital divide in Tanzania (Policy Brief No. 4). Research ICT Africa. https://www.researchictafrica.net/polbrf/Research_ICT_Africa_Policy_Briefs/2017%20Policy%20Brief%204_Tanzania%20.pdf