Tanzania: Government’s national backbone completes second phase and lowers prices

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Tanzania is making big strides in rolling out its national backbone and connecting to all of its neighbours. Also at the beginning of April this year, it dropped its bandwidth prices and amended its multi-drop access to make it cheaper. Local operators are pleased about these developments but would like to see rates come down further. Russell Southwood spoke to Peter Nogota, Head, NICTBB about what’s been happening.

When completed, NICTBB will represent a total investment of US$200 million, US$170 million of which will have come from a concessionary Chinese loan and US$30 million from the Tanzanian Government.

The project is being built in three phases: the first phase is the northern ring which connects Singida and Arusha and this has been completed. The second phase is completing the southern ring which will connect Mtware, where oil has been discovered. The third phase is building the western side of the western ring from Tunduma to Biharamulo. The second phase is completed and testing and will come on stream in the next 20 days.

In addition, the national backbone is so close to all its neighbours borders that it will add much need additional connections for those countries, giving them additional redundancy in event of cuts. Malawi is already connected at Kasumulo through MTN and Airtel. Zambia is connected at Tunduma by Zamtel and Burundi is connected at Kabanga through Ucom. Rwanda has completed a connection at Rusumo with RDB and Rwandatel.

The three not yet connected are Uganda, Kenya (three parts still to do) and Mozambique (where there are still 371 kms to complete). With the exception of a fibre link to Rwanda, all the other cross-border links above are microwave.

Overall performance on the network is acknowledged by the operators with whom we discussed it to be good. However, all sides concede that the usual problems of cuts due to road construction and vandalism exist and operators are concerned when there are cuts at the speed of repair. Ngota says that it is investing in programmes to raise public awareness and sensitise them to the importance of not cutting the fibre because they think it’s copper.

On its charges for STM1s-STM64’s, it has since 1 April dropped its prices by 35% since 1 April this year. When we asked Ngota whether there would be further price cuts, he told us:”Let’s see the market response. I’d like to do tariff revisions on IRUs. All operators want to increase their capacity on the basis of the new rates.

But what about the small operators who might not be able to afford an STM1?”We’re looking at how best to accommodate the ISPs at the lower level. It should be possible to create a shared tariff between several ISPs on a single STM1.” And what about the vexed question of the charges for multi-dropping along a route bought? “This will now cost, for example, 20% (per drop) of the STM1 you have bought.”

There have been concerns expressed about the governance of NICTBB given its closeness to the former incumbent TTCL but Ngota is clear about its role:”The structure is working OK. There is 100% account separation. TTCL is the overall manager but there is fair play and transparency with equal rights and access for all operators. TTCL has the expertise and the coverage and complements us on the last mile. Most operators are buying their last mile through TTCL.”

The Government’s overall e-strategy is to use the fibre backbone to get the population close to connectivity. The Universal Communications Access Fund will be used to implement connections to villages and connect the County offices. The e-Government agency is using the backbone to connect a number of Government organisations and offer them things like teleconferencing. NICTBB is also in discussions with broadcasters about how to use its capacity to deliver digital television across the country. Finally, the Government is looking at how best to address last mile connectivity.

In the private sector, there is a consortium between Tigo, Airtel and Zantel that is putting up metronets in the larger cities.

To get higher levels of take-up across the country – for individuals, corporates and the Government – the operators we spoke to are convinced prices need to come down more and that the multi-dropping charges need to be lower. As one told us:”It’s amazing the backbone’s there but we need to see the rates come down by at least half again, particularly if we are to get demand moving in a range of places across the country. It’s our responsibility to figure how to get the take-up of the services but the wholesale has to be at the right price to make it work.”

 

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