Boston, MA -- (ReleaseWire) -- 03/31/2014 -- BMI's view that new taxes on telecoms services will have a negative impact on the sector played out in the second half of 2013, with mobile market leader Vodacom revealing an 86% increase in corporate tax for the six months to September 2013 compared to the same period in 2013. Although the government is introducing measures to relieve the pressure on operators, we retain the view that the country's fiscal policies will shape operators' network investment strategy in 2014 and beyond in view of the need to maintain an acceptable level of profitability amid rising costs and declining revenue growth. We expect the government to invest more in higher value services in urban areas to boost revenue growth as opposed to network expansion to rural areas where ARPUs are expectedly lower.
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- The mobile sector contracted by 1.2% in 9M13, compared to growth of 1% the year before, owing significant net subscription losses in Q213.
- Mobile ARPU appreciated for seven out of the last eight quarters, with q-o-q growth of 11.6% and y-o-y growth of 17% in Q313.
- M-commerce users have continued to expand, Vodacom reporting approximately 5.5mn M-PESA users on its network, almost half of its total subscriber base.
- Growth in the fixed-line sector remains volatile, with a decline of 5.2% in Q313, compared to growth of 4.9 during the same period a year earlier.
Tanzania's score remained unchanged at 39.4 this quarter, although the country dropped one place to 17th position on the BMI telecoms Risk/Reward Ratings (RRR) table for Sub-Saharan Africa. Tanzania's rating is boosted by its comparatively high Industry Risks score, although this could be negatively affected if the government succeeds in reclaiming full ownership of incumbent telecoms operator Tanzania Telecommunications Company Limited (TTCL). Tanzania's weakest rating is in the industry rewards category, reflecting a sharp slowdown in mobile subscriptions growth and the downgrade to our five-year forecast.
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