Dar es Salaam. In spite of the vibrancy and fierce competition in country’s telecommunication industry, last September data for voice subscriptions and tele-density recorded a decline – for the first time ever.
This time around Vodacom Tanzania -- which has been trailblazing other operators in total subscriptions and market shares -- lost over 3.8 million subscriptions and ten per cent of its market share.
According to the Tanzania Communications Regulatory Authority (TCRA) Quarterly Telecoms Statistics Report for September 2012, there was a dramatic voice telecom subscription decline from the highest 28.02 million reached by June 2012 to 25.92 million by September last year.
Experts in the industry say this might have been caused by the decline of traditional voice communication which has seen minutes of use across both fixed and mobile networks increasing by just 29 per cent compared to 67 per cent increase of on-net and off-net SMS.
Some point out that multiple introductions of other services like bill payments and electronic money transfer might have been at play leading to the drop.
From the report, between April and June traffic calls (Minutes) both on net and off net calls stood at 5.17 billion which grew to 6.64 billion by September 2012, but data (SMS and MMS) both off net and on net grew by 66 per cent as from 1.32 billion by June to 2.20 billion by September the same year.
“With the changing nature of communication, more people have adopted to using smartphones, the increasing use of mobile data services causing voice subscriptions to go down,” said Raphael Michael an ICT specialist based in Dar es Salaam. Mr Michael says in recent times, due to market competitions, communication service providers have focused more on service bundling and discounting to retain market share at the expense of profit margins -- something that creates adverse impacts on subscription of other services.
The available statics show that by June 2012, Vodacom Tanzania recorded a -2 per cent growth rate against 2.3 per cent for Airtel, 0.9 per cent for Tigo and 27 per cent for Zantel -- while TTCL, Sasatel and Benson Informatics recorded a -0.7 per cent, -6 per cent and -1 per cent respectively.
This has seen telecom voice subscription for Vodacom Tanzania dropping to 8.96 million by September 2012 compared to 12.78 million subscriptions reached by March 2012. Other operators like Airtel Tanzania, Tigo Tanzania and Zantel have recorded a positive growth rate as they have increased customer subscriptions.
Commenting on the matter, Prof John Nkoma, the TCRA director general, said that the situation has been caused by the fact that there were some customers who have registered SIM cards to a network of their preference but they were not active whether in texting or messaging.
“Currently, TCRA has put a definition that any subscriber inactive within 90 days should not be counted as a customer, and all operators are aware about it,” Prof Nkoma pointed out saying this was what has contributed to the decline in telecoms voice subscription statistics.
For his part, Mr Mgovano an expert in Telecommunication Engineering and a former worker of the Tanzania Telecommunication Company Limited (TTCL) said telecoms need to improve their service delivery if they are to stay in the market.
“Customers subscribe to a certain company with the expectation of getting better services, if they don’t get what they want, they quit and switch to other convenient networks,” said Mr Mgovanu.
For his part, Dr Honest Ngowi, an economist from Mzumbe University, said some companies had very strong communication and marketing strategies to attract customers, and because customers are rational beings, they remain free to choose a network of their preference.
“In a competitive business environment most customers prefer low cost services than higher cost services, and this makes customers keeps switching across the networks,” said Dr Ngowi.
But this hasn’t been influential as to attract more customers to use the services.
Roaming charges: upon being out of Tanzania with some operators’ SIM cards, customers are subjected to roaming charges – though most of them are still uncomfortable with it – a situation that forces customers to rely on most affordable networks in the line of competition.
These are among the key challenges telecom firms are likely to face despite the fact that there are efforts to introduce more services through these networks.
On the other hand, according to statistics from TCRA, the market share percentage for Vodacom Tanzania has dropped from 45 per cent by March to 35 – being a ten per cent decrease.
SIM card registration
Despite the directives from TCRA that all telecom customers must register their SIM cards, more than 1.9 million SIM cards in use are yet to be registered. The percentage share for the unregistered SIM cards stands at 36 per cent for Zantel (841,973), 8 per cent (673,183) for Airtel Tanzania, 4 per cent (315,033) for Vodacom Tanzania and one per cent (71,905) for Tigo Tanzania
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