TTCL reveals why it needs Sh1.7 trillion

Wednesday May 22 2019

President John Magufuli receives a dummy cheque

President John Magufuli receives a dummy cheque of Sh2.1 billion from TTCL chief executive officer Waziri Kindamba (second left) as dividend to the government at the company’s offices in Dar es Salaam yesterday. Others from right are TTCL Board of Directors chairman Omar Nundu, Works, Transport and Communication minister Isack Kamwelwe and Parliamentary Committee for Infrastructure chairman Moshi Kakoso. PHOTO | ANTHONY SIAME 

By Alfred Zacharia @azacharia3 azacharia@tz.nationmedia.com

Dar es Salaam. State-owned telco, Tanzania Telecommunications Corporation (TTCL), needs Sh1.77 trillion in capital injection to fund its ambitious five-year strategic plan that would see it increase its share of the telecommunications market.

Currently, TTCL, which issued a Sh2.1 billion dividend to the government yesterday, has a voice subscription market share of two per cent, according to latest Tanzania Communications Regulatory Authority (TCRA) figures.

But once the five-year strategic plan, which was to start during financial year 2017/18, becomes operational, TTCL envisions its voice subscription market share increasing to 15 per cent. This would mean that TTCL will wedge a war against players: Vodacom, Tigo, Airtel, Halotel and Zantel and probably, grab more from the seventh placed Smart.

TCRA figures show that with a 32 per cent share, Vodacom Tanzania is the market leader while Tigo and Airtel come second and third with 29 per cent and 25 per cent market shares respectively. Halotel and Zantel come in fourth and fifth positions respectively with nine and three per cent respectively whereas Smart tails the list with only 132,292 subscribers (0.3 per cent) of the country’s 43.621 million subscribers.

“We want our mobile subscription market share to reach 15 per cent and our fixed phone market share should be 98 per cent in the coming few years,” TTCL’s board of directors chairman Omari Nundu said in Dar es Salaam yesterday.

The Sh2.1 billion dividend issued to the government during a function that was graced by President John Magufuli was part of the firm’s Sh8.3 billion profit made during the 2017/18 financial year. “We have a five-year strategic plan which was supposed to run from 2017/18 to 2022/25 but due to financial constraints, we haven’t started implementation. We hope we will start in the 2019/20 financial year,” he said.

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He said 67 per cent of the Sh1.77 trillion will be spent on increasing mobile subscription share while the remaining will improve the landline services. “If we get the funds, our firm will be able to increase the number of customers and subscribers. It will get more profits and pay more dividends to the government,” he said, exuding confidence that once implemented, the plan will make it possible for the company to earn Sh472 billion in yearly profit after 2025.

According to Mr Nundu, at least Sh600 billion must be sourced to kick-start the plan implementation in the 2019/20 financial year.

President’s observations

To ensure that TTCL, which has 711,411 voice subscribers in a market where seven firms scramble for 43.621 million subscribers, President Magufuli directed firm’s chief executive officer Waziri Kindamba to present to him the names of ministers and permanent secretaries who subscribe to TTCL services.

He said if possible, it wouldn’t be a bad idea to have all public servants who receive communication allowances to subscribe to TTCL.