By Fumbuka Ng'wanakilala
DAR ES SALAAM, Aug 21 (Reuters) - The Tanzanian unit of
South Africa's Vodacom plans to invest 200 billion
shillings ($124 million) to expand its network this year but
said rising taxes could stifle the sector.
Rene Meza, the managing director of the largest mobile phone
operator in Tanzania, said on Wednesday he expects more growth
in subscriber numbers this year despite stiff competition.
"This year will see us invest over 200 billion shillings in
network expansion, data and M-Pesa (mobile phone cash transfer
service)," the Vodacom Tanzania managing director told Reuters.
Telecommunications is the fastest-growing sector in east
Africa's second-biggest economy and the government is keen to
get a higher share of revenue from it.
But mobile phone operators say the government's introduction
of a new tax of 1,000 shillings per month on every SIM card and
an excise duty of 0.15 percent on money transfers could hurt
investment.
They argue the SIM card tax will delay expansion of mobile
phone use among the poor majority in rural areas - around 23
million Tanzanians do not use mobile services.
The tax was introduced from the start of July this year but
the president ordered its enforcement to be frozen pending a
review after a public outcry.
"The mobile industry in Tanzania is already heavily taxed.
Additional taxes will definitely discourage
investment
particularly for rural expansion," Meza said.
The nation of 45 million people has a mobile penetration
rate of 48 percent, or about 22 million subscribers, according
to the Mobile Operators Association of Tanzania (MOAT).
Vodacom Tanzania had about 9.7 million users by June. Other
mobile operators in the country include Airtel Tanzania, the
local subsidiary of India's Bharti Airtel Tigo
Tanzania, a unit of Millicom International Cellular <
and Zantel, part of the UAE's Etisalat
($1 = 1617.0000 Tanzanian shillings)
(Editing by James Macharia; Editing by Anthony Barker)
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