All systems gogo for Vodacom Tanzania Ltd

Dar Es Salaam, United Republic of Tanzania - Tanzanian President Benjamin Mkapa will speak to South African President Thabo Mbeki tonight via an international cellular telephone hook-up made possible by a $120 million investment in the United Republic of Tanzania by South African cellular network operator Vodacom.

Vodacom Tanzania Ltd announced the completion of its state-of-the-art Tanzanian GSM infrastructure at a high-level ceremony attended by about 250 African dignitaries in Dar Es Salaam on Thursday night, having been issued a licence to operate a GSM cellular network by the Tanzania Communications Commission in December 1999.

"Internationally, the launch of Vodacom Tanzania Ltd is seen as a significant step by a South African company in helping President Mbeki realise his ideal of an African Renaissance. This is especially true in light of the warm relationship between the two countries dating from the earliest phases of the struggle for liberation," said Andrew Mthembu, Chairman of Vodacom Tanzania Ltd and MD of Vodacom (Pty) Ltd in South Africa.

More than 11 000 subscribers have connected to Vodacom Tanzania Ltd since the commercial switch-on two weeks ago. On the first day alone, Vodacom Tanzania Ltd gained 3 000 subscribers. In contrast, Tanzania`s three other GSM and analogue cellular networks have less than 100 000 subscribers between them after six years in operation.

An estimated 52 000 people travel between South Africa and Tanzania each year and Vodacom Tanzania Ltd now provides cellular coverage in the tourist areas of the Serengeti, Zanzibar and the International Airports of Dar Es Salaam, Kilimanjaro and Mwanza. Dar Es Salaam, Morogoro, Dodoma, Tanga, Arusha and Mwanza are also covered.

"Vodacom is looking at all opportunities on the African continent that make economic sense and with just 300 000 fixed and mobile telecommunications users out of a population of 30 million, Tanzania is the potential cellular jewel of Africa," said Mr Mthembu.

The World Economic Forum Competitiveness report for Africa rated Tanzania as first among the most improved and second among the most optimistic African countries.

"Prospects for rapid growth are probably better than initially forecast in the light of the 5% growth in Tanzania`s GDP during the 1999/2000 financial year and the increase of 1,7% in per capita income," said James Rege, Managing Director of Vodacom Tanzania Ltd.

Mr Mthembu said that the success of GSM in South Africa has ensured that the South African GSM model is set to become a blueprint for the roll-out of GSM cellular networks across Africa. Vodacom already operates a GSM cellular network in Lesotho in partnership with local investors.

"Vodacom believes it makes sense for telecommunications in Africa to be provided by means of the latest digital cellular technology. When the cost and time taken to lay cables in Africa`s underserviced areas is taken into account, cellular makes more sense. Radio is expensive in terms of the initial set-up costs, however the roll-out can take place far quicker," said Mr Mthembu.

Mr Rege added that Vodacom Tanzania Ltd will be offering the latest products and services similar to those available in South Africa and the company expects prepaid cellular to be very successful owing to the cash nature of business conducted in Tanzania.

Tanzanian shareholders own 49% of the new cellular network and include Caspian Construction and Planetel Communications, while Vodacom Group (Pty) Ltd has a controlling interest of 51% and the Chairman`s position.

The existing cellular networks in Tanzania are Mobitel (An analogue network with a GSM digital licence), Tritel and Zantel (operating exclusively on the island of Zanzibar). The Tanzanian Telecommunications Company Limited is the fixed-line operator and has been awarded a GSM cellular licence as part of its privatisation deal.