Tanzania’s Telecom Boom Turns Connectivity into Fiscal Strength

Tanzania’s telecom sector is crossing a new threshold. The Tanzania Communications Regulatory Authority (TCRA) reported 92.7 million active mobile connections as of September 2025—equivalent to about 139 connections per 100 inhabitants. While many users hold multiple SIM cards, the data underscores the country’s digital expansion. Internet access—measured by active subscriptions rather than unique users—has reached 79 percent, up from just 63 percent in 2021, making Tanzania one of East Africa’s fastest-digitizing economies.

This surge is not just about connectivity; it’s reshaping fiscal and investment dynamics. Telecoms now contribute roughly 4 percent of GDP and 15 percent of non-tax government revenue, through excise duties and license fees. The sector’s revenues, estimated at over TZS 4.6 trillion (≈ USD 1.8 billion) annually, position telecoms among the top three contributors to national output.

The market is anchored by Vodacom Tanzania (DAR: VODA), Airtel Africa plc (LSE: AAF), and Tigo (part of Millicom International Cellular SA – NASDAQ: TIGO). Their combined mobile money transactions now exceed USD 80 billion annually, according to TCRA data, reflecting the growing dominance of fintech-linked ecosystems. Airtel Money and M-Pesa (Vodacom) together account for more than 85 percent of transaction volumes—underscoring how digital wallets have become systemic to liquidity management and household finance.

Technological depth is also widening. Average mobile internet speeds reached 25 Mbps in 2025, up from 17 Mbps three years earlier, while Kenya’s median speed stands around 41 Mbps and South Africa’s at 68 Mbps (Ookla Q2 2025). The rollout of 5G infrastructure by Huawei and Ericsson, combined with the landing of the 2Africa undersea cable in Dar es Salaam, is expected to boost both consumer data use and enterprise connectivity, positioning Tanzania as a regional data-hub competitor to Mombasa and Kigali.

The investment signal is equally clear. Tanzania’s telecoms have attracted over USD 250 million in new capital expenditure in 2024–2025, much of it directed toward fiber backbones and mobile money platforms. The government’s policy consistency—no major tax surprises and a stable regulatory framework—has reinforced investor confidence. The Tanzanian shilling (USD/TZS ≈ 2,585) has appreciated marginally year-to-date, supported by steady foreign-exchange inflows from telecoms, tourism, and gold exports.

Globally, the telecom surge positions Tanzania as an emerging case study in digital-led fiscal resilience. In a frontier environment where external debt pressures and currency fragility dominate, the telecom sector is delivering countercyclical growth. Mobile connectivity is not only a consumer service but an implicit public revenue stabilizer and a platform for financial deepening.

Investor sentiment reflects this structural strength. The MSCI Frontier Markets Index (NYSEARCA: FM) and regional ETFs tracking African telecom exposure have shown renewed inflows since mid-2025, particularly as investors rotate from volatile West African markets into East Africa’s more stable regulatory environments. With sovereign yields around 15.4 percent on the 10-year Treasury (UG10Y) and inflation steady near 3.8 percent, Tanzania’s telecom cashflows offer attractive local-currency yield exposure relative to global peers.

Yet sustainability challenges remain. Average revenue per user (ARPU) has stagnated at about USD 3.6 per month, well below Kenya’s USD 5.4, constraining reinvestment capacity. Competition is tightening as Safaricom (NSE: SCOM) explores potential entry via infrastructure partnerships, and as Starlink’s low-Earth-orbit service expands into East Africa, challenging incumbents on speed and affordability.

Still, Tanzania’s fundamentals give it room to lead. The country’s telecom density, stable currency, and improving digital infrastructure create the foundations for long-term value capture in fintech, logistics, and data services. For global investors, the story is no longer about basic access—it’s about monetization and scalability within Africa’s next connectivity frontier.

Those 92.7 million connections now represent measurable, monetizable demand—an asset class in waiting for investors who understand that in frontier markets, growth begins with a signal.