Local rivals MTN and Vodacom may find themselves competing in Tanzania, if speculation that MTN will be offered a cellular licence in that country pans out.
One of the cellular providers in Tanzania, Tritel, will lose its licence to operate at the end of this month. The company`s revenue has been dropping short of its operating expenses and it has been unable to meet network rollout obligations and pay regulatory fees.
With the frequency formerly used by Tritel up for grabs, Business Day reports that MTN could be the prime contender for a new licence. The paper quotes sources in the Tanzania Communications Commission saying MTN`s success in neighbouring Uganda makes it the preferred candidate.
The MTN Group in SA could not confirm that it had been offered entry into the Tanzanian market, but said no official discussions on the issue had yet taken place.
If MTN is granted a licence in Tanzania, it will be the first time the company will compete directly with Vodacom outside SA`s borders. Despite aggressive expansion throughout the continent by both companies, their footprints have not yet overlapped, although the MTN group has satellite operations in several countries where Vodacom is active, including Tanzania, through subsidiary Orbicom.
Vodacom is well established in Tanzania, a fact that could be a deterrent to MTN accepting a licence there. Vodacom was the fifth cellular provider in the country when it received a licence in late 1999, but took over more than half the market in little more than one year of operation.
The story of its success is remarkably similar to that of MTN Uganda, which also holds more than half the market share and has been ranked as the top brand in Uganda. It also operates a fixed-line business, under licence as the second national operator, focusing on fibre optic rollout.
However, MTN could potentially refuse the offer of a licence in Tanzania. The company recently declined the chance to become directly involved in bidding for SA`s second fixed-line telephone operator, preferring to concentrate its efforts on expansion in Nigeria.
MTN also has cellular licences in Nigeria, Cameroon and Rwanda, while Vodacom operates in Lesotho and the Democratic Republic of Congo, and was awarded a licence in Mozambique during 2002.
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