South Africa’s Largest Cell Phone Operators Invest In Nigeria, Tanzania

South Africa’s Largest Cell Phone Operators Invest In Nigeria, Tanzania

South Africa’s two top mobile operators are investing heavily in their African operations – MTN in Nigeria and Vodacom in Tanzania, despite a precarious tax situation in the latter, according to a report in ITWeb.

MTN Nigeria plans to spend $3 billion and has received loans involving 17 Nigerian and eight multinational banks.

Nigeria is MTN’s largest operation in terms of subscribers, with 51.3 million subscribers out of its 195 million population. MTN Nigeria is also the country’s leading cellphone operator, with about 48 percent market share, but has come under fire for not meeting quality service standards, the report said.

The loan will enable MTN Nigeria to improve network infrastructure, data quality and capacity across Nigeria.

South Africa’s largest cellphone operator, Vodacom, plans to invest $124 million in Tanzania to expand its network this year, but says rising taxes in the East African country could stifle the sector.

Rene Meza, managing director of Vodacom Tanzania – the country’s largest mobile operator – said he expects subscribers to increase this year, despite significant competition, Reuters reports.

Like many other African economies, telecommunications is Tanzania’s fastest growing industry, but mobile operators say the government’s introduction of a new tax of 1,000 shillings (about $0.61 U.S.) per month on every SIM card and an excise duty of 0.15 percent on money transfers could hurt investment, according to a Reuters report.

The SIM tax was introduced about two months ago, but was put on hold following a public outcry.

Tanzania, with a population of 45 million, has a mobile penetration rate of 48 percent (about 22 million subscribers), according to the Mobile Operators’ Association Tanzania. Vodacom Tanzania had almost 10 million subscribers.