Vodacom Tanzania Limited

The second quarter of 2007 saw no change to the ranking of the four Tanzanian operators in terms of customer numbers, with Vodacom remaining the dominant player followed by Celtel, Millicom and Zanzibar Telecom. The total customer base in Tanzania increased by 2.3 million in the year to Q2 2007 to reach 6.7 million at the end of the quarter, with penetration at 17.6%, a similar level to that of its neighbours Zambia and Mozambique. In total, there were 0.58 million net additions in the quarter, an increase on the previous two quarters although slightly short of Q2 2006's 0.59 million. In proportionate terms, however, the market is slowing as it becomes more established, with customer growth at 51% in the twelve months to the end of Q2 2007, compared to 62% in the 2006 calendar year and 75% in the year to the end of June 2006. While the Tanzanian market remains highly stratified, this does not imply that there has been no movement whatsoever. Vodacom still lays claim to over half of the country's customers with a total of 3.5 million and a market share of 51.6%, a loss of 1.3pp in the quarter, but up 0.2pp on an annual basis. Its nearest rival, Celtel, has seen consistent quarterly gains in market share over the past year and finished Q2 with 28.5%, up 1.2pp quarterly and 2.3pp yearly. Moreover, Celtel recorded its best-ever quarter for net additions with 234k, the highest figure in the market for the quarter and the first time it has outperformed Vodacom for over three years. Although it still has a long way to go before it starts challenging the market leader, Celtel's growth trend over the past year is undoubtedly encouraging for the company. The closest battle in the market is between the two smallest operators, Millicom and Zanzibar Telecom. Originally a regional operator, Zanzibar Telecom was granted a national licence in 2005 and has not looked back since. Its total customer base stands at 0.48 million compared to Millicom's 0.86 million, but its net additions for the year were 236k, over double the 104k recorded by Millicom. In terms of market share, it has gained 1.7pp yearly to reach 7.2%, while Millicom has lost 4.2pp and stood at 12.7% at the end of Q2. Zanzibar Telecom has been the market leader in terms of proportionate customer growth for all but one of the past six quarters, the exception being Q2 2006 when Millicom put in an outstanding performance of 242k net additions - a performance which was undermined by its loss of 129k customers two quarters later. The chart demonstrates the volatility of Millicom, in marked contrast to the relative stability of the other three operators; it also indicates that the fourth- and second-placed operators (Zanzibar Telecom and Celtel) are outpacing the operators placed above them (Millicom and Vodacom) in terms of proportionate customer growth. If this trend continues, then we could - in the medium to long term - see a rather more competitive market in Tanzania. SOURCE: http://www.cellular-news.com/story/25862.php