Hits Africa rolls out mobile network in Tanzania

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Lahham said Hits Africa’s could spend some US$500 million in Tanzania in the next seven or eight years.

Hits Africa is set to start mobile operations in Tanzania by the end of the year, according to the company's CEO, Talaat El Lahham. The company, which expects to gain some 600,000 subscribers in its first full year of operations, will initially roll out 2G services for voice and SMS, and 2.5G Edge services for data, in an initial investment of US$300 million.

While the company will initially focus on core voice and SMS services, it also plans to launch value-added services, such as e-commerce and mobile banking. Lahham also confirmed that while the initial rollout of the network will cost about $300 million, this could rise to $500 million in the next seven years, as the company expands and develops the network further.

Lahham is optimistic that Hits Africa will be able to compete with Tanzania’s established mobile operators including Mobitel, Celtel and Vodacom, not least because the country has a low mobile penetration rate and strong projected growth.

"We have done a lot of studies and surveys and the market is about 17% to 18% penetration only," Lahham told CommsMEA. "There were in the range of 7 million subscribers by the end of 2007, but since the population is close to 40 million, we have forecasted that the market will grow to about 45% penetration.

"There is a big opportunity for us to grow in that market. Of course all the other operators will grow as well and increase their base, but we will also have a good opportunity to build a strong subscriber base."

Hits Africa intends to gain customers moving from other networks, as well as new users, Lahham said. "We want to go to the market across the board, including from the existing market because there is high churn in the market - about 30%."

Hits Africa, a subsidiary of KSA-based Hits Telecom, has investments, operations and licences in Equatorial Guinea, the Democratic Republic of Congo, Tanzania and Liberia.

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