As more mobile phone users in Tanzania opt for third-party instant call services or over-the-top (OTT) platforms such as WhatsApp, Skype, Viber and Facebook Messenger, telecom companies’ revenue collections from voice services continue to fall.
The Dar es Salaam Stock Exchange-listed Vodacom Tanzania is feeling the pinch from these services, with voice revenue for the year ending March 2019 dropping by 1.1 per cent to Tsh388.2 billion ($168.2 million), against the Tsh392.3 billion ($169.991 million) collected for the year that ended in March 2018.
Vodacom Tanzania finance director Jacques Marais blamed it on pricing, even as average minutes of use per month rose by 5.5 per cent.
Mobile services subscribers say WhatsApp calls and Facebook Messenger are cheaper than normal voice calls and text messages.
“A WhatsApp voice call for many minutes may not use up a single megabyte of data while thousands of text messages can be sent for just one MB. And with many restaurants providing free Wi-Fi, there is no cost involved other than what you spend on food and drinks,” said Isaac Benson, a Dar es Salaam resident.
Vodacom Tanzania charges Tsh499 (21.6 US cents) for a bundle that allows seven minutes of voice calls to all networks, 40 text messages, and 1 MB of data over 24 hours.
Calls between Vodacom numbers outside the bundle are charged at Tsh4.5 (0.195 US cents) per second all day, while those to other networks cost around Tsh5.5 (0.238) US cents per second. Local text messages outside the bundle to any network in the country are charged atTsh50 (2.1 US cents) each.
Internet access providers
Telecom industry watchers say if this trend continues across Tanzania, it will ultimately see mobile service operators turn into Internet service providers and charge flat fees for connectivity, while leaving communications services to OTTs.
Nearly all smartphones have OTTs, specifically WhatsApp and Facebook pre-installed.
Statistics show that Facebook Messenger has a higher membership rate but a lower user percentage than WhatsApp.
Data from the GSM Association shows that there are around 4.9 million active social media users in Tanzania, 4.4 million of whom have access to it through mobile phones.
Meanwhile, overall Vodacom Tanzania service revenue rose by 5.4 per cent on a year-on-year basis, to $441.551 billion (Tsh1.019 trillion) driven by strong growth in M-Pesa, mobile data and messaging revenue.
M-Pesa revenue grew by 14.5 per cent to $144.512 million (Tsh333.5 billion), largely attributed to significant growth in its customer base and an increasing uptake of mobile money products as the ecosystem continues to expand, the telco said.
The Tanzania Communications Regulation Authority says that although Vodacom remains the number one mobile services provider in the country with 14.1 million subscribers — 32 percent of the overall market share — it lost some 15,535 voice subscribers between November and December 2018.
Tigo Tanzania comes in second with 12.6 million subscribers (29 per cent market share) after adding 29,703 new voice subscribers in December.
Airtel Tanzania holds a 25 per cent stake with just under 11 million voice customers as of December 2018.
In mobile money accounts, Vodacom M-Pesa leads with a 39 per cent market share (around 9,014,088 subscribers), Tigopesa comes in second with a 32 per cent stake (7,586,240 subscribers), while Airtel Money is third with 21 per cent stake (around 4,848,545 users).