May 20, 2000

Vodacom, Deutsche Telkom eye TTCL


SIX companies are competing to buy the State –owned Tanzania Telecommunications Company Limited (TTCL) next month.


Highly placed sources name the companies as Vodacom (jointly with World Tel), and Deutsche Telkom (jointly with New World Telecom).  The other Company is SASKETEL.  These three did not appear in the first list of companies which were racing to buy TTCL.


Mobile Telephone Networks, which was announced to have pulled out of the bidding last February because of what was stated as “commitments and priorities else where in Africa, “has made a comeback to the race, the sources say.


Only Telecom of Mauritius, and Telecommunications Consultants of India, appeared for the preliminary screening, called due diligence in privatization parlance.  Another earlier bidder, Korean Telecom, did not show up for the screening.  Consequently, the Government decided to wait for more prospective investors.


The presidential Parastatal Sector Reform Commission (PSRC)  has continued to hold due diligence for the pre-qualification for the various prospective investors.


The PRSC  principal communications consultant, Joseph Mapunda, confirmed that the due diligence process was going on to try to establish who would run TTCL as a private company.  However, he did not disclosed how many investors are in the race, insisting only that  “each investor is being screened individually.


The TTCL  privatization exercise was recently postponed for one recently to allow more interested parties to take part in the process.


Heavenlight Kavishe, a PSRC senior official, was last month quoted by the local Press as saying: “The divestiture exercise has been extended at the request of the pre-qualified bidders, and  not  because of the absence of competent investors.”


The Government plans to sell only 30 percent of its shares in TTCL  to private investors and retain the rest for the time being.  However, prospective investors prefer that the Government sold a majority of its shares.


In what appears to be a note of defiance,  TTCL claims that is going ahead with its plans to set up a cellular ‘phone company.  This move files in the face of World Bank advice that such a project would not be viable  for the State-owned telecommunications Company at this moment.


The view of the World Bank is that is would be foolhardy for TTCL  to establish a new service providing company at this stage, when the company, which is largest telecommunications firm in Tanzania, is at the threshold of privatization.


The TTCL public relations manager, Issa Semtawa, has been quoted in the local press as saying that the company will go aged with its plans  to launch the cell ‘phone project before June this year, regardless of what the World Bank thinks about it.


“We still intend to launch the project as planned, and we are not afraid of criticism,’’ Semtawa is reported as having said.  On the other hand, the World Bank had advised TTCL  to Spruce up its current services and network rather that enter a new, highly competitive service field at the eleventh hour of its privatization.


That advice seems to have gone into the company’s one ear, and out the other!


TTCL was issued a licence by the Tanzania Telecommunications Commission in June last year to set up a cellular ‘phone company.


The licence expired expire last December, but its validity was extended to June this year.


May 6, 2000




THE  tourism sector in Tanzania is thriving, and is showing a fairly consistent growth, with the growth rate in tourist arrivals of 16.5 per cent.  Tourist expenditure has also  increased from USD 65 million in 1990 to a projected USD 570 million in 2000.


Tourism value to the nation’s earnings has increased in real terms.


Speaking to Business Times recently,  the director of tourism in the ministry of tourism and natural resources, Saleh Pamba, said tourism accounted for 16 per cent of GDP (USD 2,263 million) in 1997.  The contribution had grown steadily from a mere 2 per cent in 1989.


By comparison, GDP contribution from the agricultural sector during the same period  crawled from 27 per cent to 28 percent; and the mining sector accounted for 1 per cent of GDP in 1989, managing only to double to 2 per cent in 1997!


By the year 2005, the tourism industry’s growth output worldwide is expected to reach USD 7.2 trillion; and 125 million new tourism – related job will be added to the existing 212 million.


It is estimated that tourism in Tanzania has created 30,000 direct jobs (and 80,000 indirect ones) for semi-skilled  people.  This makes the sector a significant employer – unlike the manufacturing sector which requires specialized skills.


The industry has generated a variety of positive economic benefits, such a improving the country’s balance-of- payments; opening access to new sources of capital; generation Government revenue; creating local employment, and fostering economic development.


Pamba disclosed that, between 12 and 15 per cent of the Government’s annual tax revenue accrues from the hospitality and tourism – related economic activities.  The tax revenue is gathered through the general tax system – particularly tax on profits – value – added tax (VAT) and through special taxes imposed on tourist activities and services.


Describing the tourism growth projections, Pamba said it is estimated that Tanzania will receive 495,950 tourists by the end of this year, and 575,000 by the year 2005.  “This target projection reflects the country’s  tourism potential to attract international tourists.  But, it is also based on the market assessment of major tour operators with programmes  to east and southern Africa,” he added.


The average length of stay per tourist (which is currently about 4.5 nights) is projected to increase to about 7.5 nights by the year 2005.


The significant factor in this increased length of stay is the expansion of tourism products  through new circuits,  new attractions  and beach products.


However, tourism has been constrained by inadequate accessibility to (and within) Tanzania.  Access from source markets like Italy and Germany is more problematic due to the non existence of direct scheduled air services.  The problem of access within the country is due to under capacity for scheduled and non scheduled air services.


According to Pamba, areas which can be explored for cooperation are joint promotion and marketing; as liberalized policies for passports and visa requirements; as well as conservation of programmes for natural, historical and cultural resources.  Others are personnel and manpower training, and international representation in foreign markets.