Vodacom Tanzanian is set to invest Tsh 200 billion ($124M) for network expansion this year.
According to Rene Meza, Vodacom Tanzania M.D, despite stiff competition Vodacom will see a steady growth in its user base despite stiff competition therefore the need for more capital injection.
“This year will see us invest over 200 billion shillings in network expansion, data and M-Pesa (mobile phone cash transfer service),” he told Reuters.
The M.D however has fears, that the firm’s plan to achieve its goals might not be achieved as the July 2013 SIM Card tax of Tsh 1000 each month and a 0.15 percent excise duty is likely to hurt the environment. Tanzania’s mobile operators argue the SIM card tax will reduce the uptake of mobile phone usage to the 23 million who have not been reached by mobile phones.
Meza told the paper, “The mobile industry in Tanzania is already heavily taxed. Additional taxes will definitely discourage investment particularly for rural expansion.”
With over 45 million people, Tanzania has some 22 millon subscribers who make up to 48 percent mobile penetration rate said the Mobile Operators Association of Tanzania (MOAT). Of the 22 million mobile subscribers by June 2013, Vodacom Tanzania reported around 9.7 million users as the leading telco.