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Tanzania: Old Media, New Media

AfricaFocus Bulletin
Apr 5, 2011 (110405)
(Reposted from sources cited below)

Editor's Note

Tanzania is only in the middle tier of technology adopters among African countries, notes Russell Southwood in the latest issue of his Balancing Act Africa newsletter. But an InterMedia national survey shows interesting combinations of old and new technologies, with text messaging leading newspapers as a source of current news (although radio remains the number one source). And there is substantial potential for rapid expansion of mobile internet in the next few years.

This AfricaFocus Bulletin contains a summary by Balancing Act Africa of results of the InterMedia July 2010 survey of media use in Tanzania, as well as several other related news stories from Balancing Act Africa, and excerpts from an InterMedia report on usage of mobile banking in Tanzania. For additional background see the Balancing Act Africa and Audiencescape websites (http://www.balancingact-africa.com and http://www.audiencescapes.org).

For previous AfricaFocus Bulletins on information and communications technology issues, see http://www.africafocus.org/ictexp.php

++++++++++++++++++++++end editor's note+++++++++++++++++

Tanzania: New survey highlights steady growth of mobile as media

Balancing Act Africa
Issue no 548 1st April 2011
http://www.balancingact-africa.com

Intermedia has released the latest in its Audiencescapes series of surveys of media use in African countries. The survey covers Tanzania and contains a number of tantalizing clues as to how that country's consumers are making use of different media. Russell Southwood picks over the findings for clues as to how things will develop in the future.

The Audiencescapes survey of Tanzania was carried out in July 2010 and is a nationally representative sample, allowing the researchers to provide accurate breakdowns of urban vs rural use.

Internet use has clearly grown in Tanzania but not at the same rate as in neighbouring Kenya. The table below shows percentage household access amongst those surveyed:

Media            All sample        Urban        Rural
Radio              85%                85%           84%
TV                 27%                59%           14%
Computer            3%                 8%            1%
Internet            4%                 8%            2%
Mobile phone       62%                82%           54%

Television access is 71% in Dar es Salaam. The figure of 4% for Internet sounds small but if you translate that into people, there are around 1.5 million people who have household access to Internet.

Mobiles are increasingly becoming a media in their own right and in urban areas, their penetration levels are as high as for radio which is the universal African media. And as the table below shows, Tanzanians (like many Africans) are using their phone's built in radio and in small numbers, watching what they describe as live TV (probably streamed via You Tube). Radio listening on mobiles is highest amongst those under 34:

Activity         All sample        Urban        Rural
Radio               13%              18%          10%
Send SMS            61%              68%          57%
Watch live TV        1%               3%           1%

Mobile TV has yet to find the right business model and where it is offered as a service, has only acquired tens of thousands of subscribers. Furthermore the DStv version requires a special DVB-H handset and these are expensive and not many are on the market. Nevertheless, if relatively slow tech-adopters like Tanzanians are already watching live streams, there's going to be a market out there. What else can you do when you're sitting in Africa's ubiquitous urban traffic jams and can't get home for a live TV programme?

Internet use in Africa used to be about a limited number of internet search activities and sending e-mail but as the table below shows, Tanzanians are now doing a much wider range of things:

Activity                % of sample using Internet
Send or receive e-mails             57%
Latest news                         51%
Research topics                     32%
Social networking site              41%
Listen to radio                      7%
Play games                          13%

The figures reflect the rise of Facebook use in the early adapter markets across the continent but it's worth noting that Tanzania's Facebook user numbers are significantly lower than those in neighbouring Kenya. Again, there is a significant percentage of Internet users who are choosing to listen to radio over their Internet connection.

If you look at media use on a once a week basis, to some greater or lesser extent, it reflects the overall household access figures above:

Media            % of total sample
Radio            91%
TV               41%
Newspaper        22%
Mobile           62%
Internet          3%

But when those sampled, were asked what were the important sources of news and information on a weekly basis, the results look rather different:

Source            % of total sample
Radio                  83%
TV                     41%
Newspapers             21%
SMS text               35%
Internet                4%

In other words, mobile is a news and information media with greater reach than newspapers and this is particularly true amongst lower income groups and those in rural areas. The position of newspapers is also threatened by Internet access: 4% vs 21% is a rather uneven fight but amongst the top income tier (who are among the key purchasers of newspapers) the percentage using the Internet is 17%. Interestingly, when those surveyed were asked about trustworthiness of different sources, they rated SMS and newspapers more or less equally.

So what do these results tell us? Tanzania is not one of the continent's early tech adopters so it is perhaps more representative of the middle range of countries. Nevertheless, it has a sizeable and growing economy. Therefore it is possible to draw some of the following conclusions:

  • There is a steady build up of Internet use towards a "critical mass", something much encouraged by the use of mobile Internet. It's not a case of if it will grow further but when. On the basis of these figures, it is not hard to see Internet use going up to 7-10% in the next two years, particularly as prices to consumers continue to fall.
  • Mobile is a media that is rapidly establishing its position with both SMS and Internet. In two years time, 20-40% of users may have either smartphones or feature rich phones. But there is no sign yet that mobile operators have grasped the significance of this shift and started to work with key content partners to create specific local (in Swahili) products.
  • The same point can be made about delivering radio and TV to mobile users. Operators can either stream their own output to users or work with local media providers to build an audience through the mobile channel. Why do this and the news content development suggested above? Because mobile will slowly become an advertising medium and because of its wider reach and better colour presentation, it will take these revenues from poorly printed, expensive to produce newspapers and bad radio channels.

InterMedia has its AudienceScapes site which can be found on the link below. Whilst aimed at the development sector, there is a great deal of useful information for anyone involved in communications and technology in Africa:

http://www.audiencescapes.org/


Tanzania: Internet Service Provider Eyes Bigger Market Share

Balancing Act Africa
Issue no 548 1st April 2011
http://www.balancingact-africa.com

Tanzanian ISP Raha has resolved to extend its network connectivity services to cover medium and small scale enterprises, in a bid to expand its customer base. Raha's CEO, Aashiq Shariff said at a press conference in Dar es Salaam on Monday when announcing plans to re-brand that there is a swift growth and adaptation of the Information Communication Technology (ICT) into the economic activities.

With the use of WiMax, he said Raha is committed to provide broadband connectivity solutions for small, medium businesses, schools and large enterprises. "Tanzania is evolving in the ICT thus compelling network connectivity service providers to take lead in offering quality, reliable and affordable services in the same pace," he said, adding, "We grow together, we support our clients for them to manage the fast growing digital world."

...

National fiber-optic network that will cover every district in the nation by mid-2011 is expected to pull down costs for operators and improve connectivity in the country.

Speaking earlier at the same occasion, the company's Chief Technical Officer, Nyangu Umeghji said connectivity to the rest of the regions across the country and frequent power cuts have been major challenges facing the ICT industry, leading to increased operating costs. "To ensure a constant provision of reliable services, Raha has embarked on the use of solar power in its various stations as solution to the problem of power blues," he said.

However, he raised fears over the proposed condition by the National Information Communication and Technology Broadband Backbone (NICTBB), that a company seeking to provide broadband services should buy a minimum of 100megabits per second. He said the condition would be a stumbling block for the local small scale network providers enterprises to excel in the business.

Source: Tanzania Daily News


Tanzania's Fibre Backbone is set for Completion this year

Balancing Act Africa
Issue no 537 14th January 2011
http://www.balancingact-africa.com

Construction of the national information communication technology broadband backbone is expected to be completed this December, according to a senior government official. The move brings the hope of increased broadband uptake and reduced Internet tariffs in the Tanzanian hinterland and beyond.

The backbone, which is the terrestrial continuation of the fibre optic submarine cables that landed in the Dar es Salaam coast last year has already contributed to a significant drop in Internet capacity charges. The NICTBB project was embarked on in 2008 and is expected to cost about Sh251 billion when it is completed at the end of this year.

"The construction of the backbone was divided in two phases to cover the whole country. Phase I became operational in July 2010 and covers the northern ring of the network with ten Points of Presence (POP) which include Dar es Salaam, Morogoro,Singida, Iringa, Babati, Arusha, Namanga, Moshi and Tanga," Gilder Kibola, Head of the National ICT Broadband Backbone told The Citizen in an interview recently in Dar es Salaam.

"Phase II is expected to be completed by December 2011 with operational PoPs at Lindi, Mtwara, Tunduru, Songea, Sumbawanga, Tabora, Kigoma, Manyovu," she added. The project is funded by a $170 million soft loan from China and Sh30 billion from government sources.

The government intends to turn the country into the regional ICT hub, according to Ms Kibola. Since phase I of the backbone became operational last July four major locally licensed cellular and data operators were subscribed to NICTBB services, with other two companies from landlocked countries of Malawi and Zambia getting access to NICTBB through licensed local operators.

According to the Tanzania Communications Regulatory Authority, the broadband subscriptions stood at four million by the end of last year.

Source: The Citizen


Bank of Tanzania, TCRA Partner on Mobile Phone Cash Transfers Control in Tanzania

Balancing Act Africa
Issue no 541 11th February 2011
http://www.balancingact-africa.com

The strong growth of mobile payment services in the country has led to the signing of the Memorandum of Understanding (MoU) on the services' joint supervision by the Bank of Tanzania (BoT) and Tanzania Communication Regulatory Authority (TCRA).

BoT has, in its maiden Financial Stability Report, attributed the sharp increase in the number of subscribers to the mobile payments mainly to limited access to formal banking services, especially in rural areas. "... in this regard, the mobile payment provides an avenue for linking bank account holders to the unbanked population," the central bank says in its 33- page report, which the bank's governor, Professor Benno Ndulu, launched in Dar es Salaam over the weekend.

According to provisional data, as of June 30, 2010, the number of mobile phone subscribers stood at 18.5 million, with 9.2 million of them registered for mobile payment services. Mobile payment schemes involve not only funds transfers but also payment for retail goods and services.

Mobile payment services are specifically used to top-up mobile phone credits, airtime transfers between mobile phones and corporate bill payments - water and electricity, for instance.

Four mobile network operators - Vodacom, Airtel, Tigo and Zantel - are currently offering the mobile payment services. The service provision however requires that the phone companies partner with commercial banks.

"The existing arrangement creates gaps in the regulatory framework because two regulators - BoT and TCRA - each with a limited scope of coverage, oversee the mobile payment services," the report says, noting that the signed MoU provides a mechanism for regulatory and supervisory coordination between the two regulators.

While the central bank regulates the financial transactions, the TCRA focuses on the communication infrastructure. Industry analysts say that the significant growth in the usage of mobile phones offers great opportunity to extend financial and other services to millions of those in the unbanked community.

Source: Tanzania Daily News


Mobile Money for the Unbanked: Lessons from Tanzania
December 2010

AudienceScapes
http://www.audiencescapes.org

[Excerpts: Full text and additional reports on Tanzania and other African countries available at http://www.audiencescapes.com]

In the development field, there is great interest in the use of mobile phones to increase citizens' access to efficient and affordable financial services – a practice commonly referred to as mobile money. The July 2010 AudienceScapes national survey of Tanzania queried respondents on their use and knowledge of mobile money, with a view toward answering two key questions: Who uses these services in Tanzania? Are users mainly those who previously had access to other banking services, or do they include the poorest and largely unbanked Tanzanians at the so-called "bottom of the pyramid" (BOP)?

Key Findings

The AudienceScapes data - gathered roughly two years after M-PESA launched the first mobile money service in Tanzania - show that 11.5 percent of Tanzanian adults (2.75 million out of an estimated 23.9 million) had used an m-money service at some point. This compares with a 54.6 percent rate of use among Kenyans two years after M-PESA launched there (based on the results of the April 2009 AudienceScapes survey in Kenya).

The Tanzania survey also points to a recent, sharp increase in the number of people registering for m-money services: 63 percent of those who said they had used m-money also said that they first started using a service in the past 6 months. This points to a m-money market poised for further expansion.

More relevant from a development perspective, only 3.9 percent of Tanzania's financially excluded or unbanked adults had used mobile money. The rate was 20 percent in Kenya in July 2009.

In other words, at the time of the survey, m-money in Tanzania was primarily a tool for those who were already participating in the financial system. ...

Even so, there is evident demand for m-money services, as nearly 30 percent of Tanzanians surveyed said they either send or receive money transfers, or do both – which are m- money services' bread-and-butter transactions. Some 34 percent of money senders do so at least once a month and 56 percent at least once every three months.

Despite the relative lack of unbanked or lower income m-money users, there is room for optimism for development groups pushing m-money as a tool of financial empowerment for BOP individuals, if only because more lower-income Tanzanians are using mobile phones. The survey defined recent adopters of the mobile phone as those who first acquired a mobile phone in the past year, and revealed that this group includes many more lower-income individuals than those who adopted mobile phones earlier (between two and five years ago). Thus, as mobile phone usage reaches further down the income scale, there is a greater chance that BOP individuals will use m-money services. ...

Notably, the survey pointed to "lack of knowledge" as a key impediment to use of mobile money.

Tanzanian M-Money: The Mobile Communications Context

Mobile money in Tanzania is taking shape amid a fast-growing market for mobile communications in general. The International Telecommunications Union (ITU) estimates that the number of mobile subscriptions in Tanzania more than doubled between 2007 and 2009, from 8.3 million (20.2 subscriptions per 100 inhabitants) to 17.5 million (40 subscriptions per 100). The Tanzania Communications Regulatory Authority (TCRA) places the number of mobile subscriptions as of June 2010 at 19.42 million, or 46.35 subscriptions per 100.

...

The AudienceScapes data also corroborate supply-side statistics showing that Tanzania's mobile market has seen its strongest growth over the past two years. Twenty-eight percent of mobile phone owners in the survey said they purchased their first phone in just the past year ("recent adopters"). In fact, about 62 percent of owners said they purchased their phone in the past two years.

... Fifty-two percent of recent mobile adopters reported having a daily household income of less than $2 (fairly close to this segment's representation in the general population), compared to only 28 percent of early adopters. Recent adopters also were more likely than early adopters to be women, rural dwellers and unbanked.

Tanzania M-Money: The Financial Services Access Gap

One of the main arguments for m-money services from a development perspective is that they hold the potential to expand safe and affordable financial instruments (such as for saving, transfers and payments) to BOP individuals. Implicit in this argument is the belief that many people are excluded from the financial services sector.

The AudienceScapes survey tested this hypothesis and found that, while there has been progress in extending some financial services to more people, over half of adults do not have access to saving, borrowing and investing instruments. This is in line with findings from the 2009 FinScope survey, which concludes that progress in extending banking services to more Tanzanians has been slow, especially in rural areas, where brick and mortar banking establishments are scarce.

The AudienceScapes survey indicates that only 11 percent of rural residents had access to formal banking services. Perhaps more interesting for m-money proponents, 43 percent of respondents in the survey who said they are mobile phone owners fell into the unbanked category. Among recent phone adopters (those who acquired a phone less than a year ago), this percentage jumps to 56 percent.

Tanzania M-Money: The Need for Money Transfer Services

Money transfers, the first "killer application" for m-money service providers, remain a core feature of such services in many countries; they are marketed as a safer and/or economical alternative to transfers handled by the post office, friends or relatives, bus companies and others. ...

Slightly more than 13 percent of respondents in the AudienceScapes survey said they send money to other people, either in Tanzania or in another country. Conversely, nearly 24 percent said they receive money transfers. In aggregate, nearly 30 percent of Tanzanians surveyed said they either send or receive money transfers, or do both. ...

When money senders were asked an open ended multiple-response question about what they spend the transferred funds on, 41 percent said it was for "buying food"; that figure was 48 percent among those who live on $2 or less a day. The second most cited expense was paying for school fees and supplies (21 percent).

These answers emphasize the importance of transfers as a means of sustaining the income of a large number of Tanzanians. Lowering the overall cost of sending money to others is an important undertaking, as the smallest of margins that can be saved will have an impact on both senders' and receivers' purchasing power. A recent price study showed how existing m-money services, M-PESA and Airtel, do just this. The average fee for sending money via M-PESA or Zap (now known as Airtel Money) was gauged to be around 1.8 percent of the total amount of money transferred, while the range of fees for other types of transfer services were between 9 and 10 percent.

...


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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