Why telephony costs have plunged in the last decade

Why telephony costs have plunged in the last decade

PHASES 1,2 OF BROADBAND PROJECT Implementation of Phase I and Phase II started in July 2009 and October 2010, respectively.They were completed in November 2011 and June 2013 respectively.Phase III sub-phase one started in November 2014 and was completed.

Dar es Salaam. The costs of mobile and fixed telephone communications have dropped by 74.8 per cent and 54.4 per cent respectively over the past ten years.

Speaking in an exclusive interview with The Citizen last week, China International Telecommunication Construction Corporation (CITCC) Tanzania managing director, Haijun Jiang, attributed the trend to the construction of the National ICT Broadband Backbone (NICTBB).He said the cost of mobile phone voice service went down to about Sh29 per minute, far below the Sh115 charged ten years ago.

Mr. Jiang added that, during the period reviewed, fixed telephone voice service fell to about Sh67 per minute compared to Sh147 a decade ago. The number of mobile phone subscribers climbed to almost 42 million last year com-pared to a relatively measly three million in 2005, according to the Tanzania Communications Regulatory Authority (TCRA).

The regulator’s data also show that the number of mobile subscribers rose to 42 mil-lion, compared to five million a decade ago. Internet users increased to 23.1 million, well above the 5.6 million recorded ten years ago.

“Despite the fact that Tanzania was home to only 50 million population last year, the penetration rate of mobile telephony is already in line with the penetration rate in the developed world,” noted Mr. Jiang.

To date, Tanzania is reportedly the only country in Africa with most modern communications infrastructure systems. When phase I and II of the ICT Backbone construction was completed in 2012, Tanzania realised its first goal to become East Africa’s communication hub.

Things became even better when CITCC completed the construction of phase-III, internet protocol (IP) backbone and information data centre, which is the foundation for the communications infrastructure system. CITCC brand manager Justina Taylor said the phase -II sub-phase-II is ready to start. “Only some documents are undergoing processing by the Tanzania Finance ministry and Exim Bank of China,” Ms. Taylor said.

Since phase-I was handed over and began to operate in the past nine years, approximately $100 million in revenues has been generated for the government, according to reliable sources. Official data show that, in 2016, the ICT industry contributed about 2.1 per cent of the Gross Domestic Product (GDP). During the project’s implementation, more than 8,500 jobs were created for the Tanzanian people, according to the CITCC. The manager of government strategic infrastructure at NICTBB, Mr. Adin Mgendi, applauded the project, saying it made the country enjoy a highly efficient communication system.

“The system has started to show its strong profitability and that is why Tanzanian people can now enjoy better communication service at low cost rate,” Mr Mgendi told The Citizen.

He said all kinds of new services have enriched the lives of Tanzania people.

Mr Mgendi added that those people who live in far reaching rural area could enjoy the modern technology for reducing poverty. The government had the 10-year strategic plan to build a National ICT Communication Infrastructure. In the event, it selected CITCC as its partner because the company has a strong background and long-time experience as the largest communication systems integrator in China.

Again it (the company) came with the solution of financing with the Chinese government concessional loan for the project. This is the important condition for the Tanzania’s ministry responsible for Communications in looking for their partners in development.

After the company signed the necessary documents, including the contract, experts from both parties sat together to draw detailed implementation plans. Implementation of Phase I and Phase II started in July 2009 and October 2010, respectively.

Implementation was completed in November 2011 and June 2013 respectively. Phase III sub-phase one started in November 2014 and was completed October 2017.The Tanzania government’s total investments in the project stood at $263.7 million (Sh606.5 billion), according to the company’s press release availed to The Citizen.

Some $170 million (about Sh391 billion) was injected into the project during phases I and II which - among other activities - involved connecting up the international submarine cable. Some $93.7million (Sh215.5 billion) was invested during the phase III sub-phase one. Among other works, this involved construction of National IP backbone network and transmission expansion.