Mobile companies reduce internet bundle quantity, retrench

By Mnaku Mbani

Consumers in Tanzania’s mobile telecommunication sector are digging dip into their pockets after service providers raised their tariffs for internet packages, ahead of listing their shares during this first quarter of this year. Apart from raising internet costs, other companies have announced retrenchment of employees of which will now result into job losses in non technical employees.

Vodacom Tanzania, the leading network with highest market share was the first mobile companies to adjust their internet tariffs, of which has seen the reduction of internet bundles by half.

For example Tsh1000 ($0.450) was previously buying 150MB bundle for 24 hours, but Vodacom has trickled it down to only 70MB, which is more than 50 per cent.

The tariff adjustment has been applied for 24 hours bundle, except for 1GB bundle which has remained at normal rate of Tsh2,000 (about $0.90).

Vodacom has also adjusted the Tsh1,000 internet bundle which previously enabled a subscribe to obtain 350MB for 24 hours as now it gives you only 200MB.

Vodacom Tanzania has already submitted their application at the Capital Markets and Securities Authority (CMSA) for approval. If it will be approved, the company is expected to float the Initial Public Offering (IPO) during the current quarter.

According to Tanzania Communication Regulatory Authority (TCRA) Vodacom Tanzania is a subsidiary company of Vodacom Group (Pty) Limited, South Africa which is also a subsidiary of Vodafone Group UK.

Vodacom Group (Pty) Limited owns a majority share portion of 65%, the remaining 35% is owned by Tanzanian shareholder, one Mirambo ltd.

Tigo Tanzania, which is the third in largest market share, has also followed the suit by reducing their internet bundle for 24 hours package.

According to information obtained from the company, consumers will now obtain reduced internet bundles for 24 hours package but the weekly and monthly tariffs have remained the same.

This changed is targeting low income and middle income earners who usually buy 24 hours internet and they accounts for more than 70 per cent of mobile subscribers.

For Airtel Tanzania, the company has recently announced the retrenchment of employees, of which will see hundred of not technical staffs, main the customer care department.

Airtel Tanzania is another common brand in the market having 10,887,742 voice telecom subscribers and 3,957,509 mobile money subscribers. Airtel Tanzania, is an extension of another multinational telecom brand of Bharti Airtel.

Bharti Airtel Limited is an Indian multinational telecommunications Services Company headquartered in New Delhi, India. It operates in 20 countries across South Asia, Africa, and the Channel Islands.

The announcement read "behalf of Airtel Tanzania, ISON said the retrenchment will be made to ally right size operation as per business requirement.

The announcement says; “looking at the forecast shared our client, at the moment the company continues to face challenge of balancing the costs of doing business against revenue being generated.”

“Beside our operating costs being extremely high, our employee’s costs and other overheads have continued to rise disproportionally to our revenue,” said an announcement by ISON BPO Tanzania management.

According to an announcement, the targeted number of employees equivalent to 57 employees at agent level and proportionate support staff.

Tanzania has more than 80 communication companies which are required to list their shares at the Dar es Salaam Stock Exchange (DSE), as per the Electronic and Postal Communication act 2010.

The act required all communication companies, which include mobile telecommunication and internet services providers to list their shares by floating 25 per cent of the stake to the public by the end of last year.

Equities market analysts have said that the listing of the communication companies will boost up products at the DSE, which is currently facing the shortages of products.

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