The rapid growth of internet connectivity in Tanzania has become a critical
driver of economic transformation.
A recent quarterly report by the Tanzania Communication Regulatory Authority
(TCRA) shows that number of internet subscriptions increased by 5% within three
months, from 39.3 million in June 2024 to 41.4 million in September 2024.
The milestone reflects the increasing integration of digital services into
the Tanzanian economy and the transformative potential of technology in
advancing socioeconomic development.
Mobile broadband dominates the internet landscape in Tanzania, with 22.9
million subscriptions by September 2024. Its widespread adoption underscores
its role as the most accessible and affordable means of connectivity for
millions of Tanzanians.
The extensive reach of mobile networks, coupled with the affordability of
mobile data packages, has enabled individuals and businesses across urban and
rural areas to tap into the digital economy.
The continued prevalence of 2G technology, with 18.3 million active
subscriptions, highlights the persistent digital divide. While 2G provides
basic internet services for underserved regions, the shift toward faster
technologies like 4G and 5G is gaining momentum.
This transition is essential for increasing productivity, fostering
innovation, and enhancing the overall user experience.
Mobile internet services not only connect individuals but also facilitate
mobile money transactions, e-commerce, and access to government services, all
of which are critical for economic inclusion.
Fiber-to-the-Home (FTTH) and Fiber-to-the-Office (FTTO) technologies,
although limited in adoption, represent a growing niche with significant
potential.
By September 2024, FTTH and FTTO services accounted for 59,743 and 10,449
subscriptions, respectively. These high-speed, reliable internet options cater
primarily to businesses, government institutions, and affluent urban
households.
The adoption of fiber-based technologies is vital for sectors requiring
robust connectivity, such as finance, healthcare, and education. For example,
e-learning platforms depend on stable and fast connections to deliver quality
education, while healthcare providers use digital systems for telemedicine and
data management.
Expanding fiber infrastructure could also attract foreign direct investment
(FDI) by providing the connectivity required by multinational corporations
seeking to establish operations in Tanzania.
Tanzania’s telecommunications market is fiercely competitive, with Vodacom
holding a 32.5% market share, followed by Tigo (27.9%) and Airtel (25.1%).
Halotel and TTCL complete the top five, with market shares of 10.8% and 3.7%,
respectively.
The companies have invested heavily in infrastructure development and
marketing strategies, making internet services more accessible and affordable
to a broader population.
The competitive dynamics encourage continuous innovation, benefiting
consumers through improved service quality and pricing.
Vodacom’s leadership position can be attributed to its extensive network
coverage and diversified service offerings, including mobile money and
enterprise solutions. Meanwhile, smaller players like TTCL leverage niche
markets, such as government contracts and high-capacity fiber services, to
remain competitive.
The average Tanzanian internet user consumed 4,855 MB of data per month as
of September 2024, a figure that reflects growing reliance on the internet for
daily activities.
From remote work to online shopping and entertainment, the increasing
consumption of data highlights the deepening integration of digital solutions
into personal and professional life.
The economic implications of this trend are profound. High data usage drives
demand for digital services, creating opportunities for local tech startups and
service providers.
E-commerce platforms, for instance, have seen increased traffic as more
Tanzanians shop online.
Similarly, digital marketing has become a vital tool for businesses looking
to reach wider audiences and contribute to job creation and economic
diversification, as businesses invest in technology to enhance their
operations.
Moreover, the rise in internet subscriptions, from 25.8 million in 2019 to
35.9 million in 2023, illustrates a steady digital transformation. This growth
is supported by government initiatives aimed at improving ICT infrastructure,
such as the National ICT Broadband Backbone (NICTBB), and partnerships with
private sector players to expand connectivity.
Despite these gains, challenges persist, particularly in rural areas where
connectivity remains limited. The affordability of devices and data packages
continues to be a barrier for low-income households, restricting their access
to the digital economy.
Additionally, the uneven distribution of infrastructure, with urban areas
enjoying better services than rural regions, exacerbates the digital divide.
Addressing these challenges requires targeted investments and policies.
Expanding the reach of 4G and accelerating the rollout of 5G can bridge the
connectivity gap.
Government subsidies and public-private partnerships can also help lower the
cost of internet services and devices, ensuring inclusivity in digital access.
The rapid expansion of internet connectivity offers Tanzania immense
economic opportunities. Enhanced digital infrastructure can significantly boost
productivity across various sectors.
In agriculture, for example, internet access enables farmers to access
market information, weather forecasts, and modern farming techniques.
Similarly, the tourism industry benefits from online booking systems and
digital marketing campaigns that attract international visitors.
Furthermore, improved internet connectivity facilitates the growth of
e-government services, enabling citizens to access public services more
efficiently.
This reduces bureaucratic hurdles and fosters transparency, contributing to
better governance. The digitalization of financial services, particularly
mobile money, has also played a transformative role in financial inclusion,
allowing millions of unbanked Tanzanians to participate in the formal economy.
The education sector stands to gain significantly from better internet
access. Online learning platforms and digital libraries provide students and
teachers with resources that were previously inaccessible. This can help bridge
educational disparities and improve overall literacy levels, which are crucial
for long-term economic growth.
When compared to its East African counterparts, Tanzania’s internet growth
is impressive but reveals areas for improvement.
Kenya, for instance, leads the region with over 46 million internet
subscriptions and a higher penetration rate. This success can be attributed to
early investments in ICT infrastructure and widespread adoption of mobile money
services like M-Pesa.
Kenya’s robust e-commerce ecosystem and tech innovation hubs further
solidify its position as a regional leader.
Uganda, with approximately 22 million internet subscriptions, is also
experiencing steady growth. However, its market is less diversified than
Tanzania’s, which is characterized by a balanced mix of mobile and fixed
broadband services.
Rwanda, though smaller in population, has made significant strides in
leveraging internet connectivity for development. The government’s focus on ICT
policies and initiatives like the Kigali Innovation City exemplify Rwanda’s
commitment to becoming a digital hub in Africa.
Tanzania’s consistent growth and expanding infrastructure position it as a
strong contender for regional leadership in the digital economy. By addressing
challenges such as affordability and rural connectivity, Tanzania can unlock
its full potential and compete more effectively within the East African
Community.
Tanzania’s internet landscape is evolving rapidly, driving economic
opportunities and social transformation. The growth in internet subscriptions,
rising data consumption, and competitive telecommunications market highlight
the sector’s dynamic nature.
While challenges remain, particularly in achieving universal access, the
ongoing investments in ICT infrastructure and digital inclusion initiatives
pave the way for sustainable development.
As Tanzania continues to harness the transformative power of the internet,
it has the potential to emerge as a regional leader in the digital economy. By
capitalizing on its strengths and addressing its weaknesses, the country can
create a more connected, innovative, and prosperous future for its citizens.