Airtel Africa acquires 5G spectrum in Tanzania for $60m

Telecommunication company, Airtel Africa Plc has announced that it has acquired an additional spectrum in Tanzania. The Tanzania Communications Regulatory Authority (TCRA) sold the 140 megahertz spectrum split between 2600 and 3500 MHz bands to Airtel for $60.1 million.

This is to support network development for mobile data as well as fixed wireless home broadband capability, including 5G rollout, and to provide significant capacity to match the country’s sustained robust data growth.

Speaking on this acquisition, the telecommunication company in a statement said,

This investment reflects our continued confidence in the opportunity inherent in the Tanzanian market, supporting the local communities and economy through furthering digital inclusion and connectivity,

Airtel Africa’s expansion

With the advent of 5G technology, telco company, Airtel Africa has been working to establish 5G presence in 14 African nations and is working to broaden its coverage.

And, this is coming at an unusual cost.

In 2020, Airtel Africa purchased 10MHz of spectrum in the 900MHz for $94 Million in order to broaden and enhance its services in Nigeria. The spectrum was anticipated to cost $70 million, excluding the obligatory NCC fees.

Sources later revealed that Airtel Nigeria will actually pay $94 million for the spectrum.

In June 2022, Airtel also acquired a 58MHz spectrum in the Democratic Republic of the Congo for $42 million. This spectrum is divided throughout the 900, 1800, 2100, and 2600 MHz bands. This was done to promote the DRC market’s 4G expansion for mobile data and fixed wireless home internet.

Just one month after acquiring the DRC spectrum, Airtel Africa paid $40 million to the Communications Authority of Kenya for a 60MHz of 2600MHz telecom spectrum.

That is a total transaction of $82 million in two months.

Why Tanzania?

With seven mobile operators, including Airtel and Vodacom, Tanzania is one of the most competitive markets in Sub-Saharan Africa. Vodacom is leading the pack of other telecommunications companies in terms of coverage and revenue.

In an analytical report by Ookla. Vodacom had approximately 15.6 million subscribers at the end of Q2 2022. This translates to a 28.8% market share, while Airtel has a 27.4% market share in Q2 2022 with 14.8 million users.

In September 2022, Vodacom introduced 5G mobile service in Dar es Salaam with plans to roll it out to about 230 places in additional cities. Vodacom will eventually increase its speeds as more people switch to 5G smartphones and pricing. 

It is also investing in new ways to expand its services. In May 2022, the company entered a partnership deal with the National ICT Broadband Backbone (NICTBB), a national fibre optic cable network to expand its network’s scope.

This decision signals Airtel’s desire to win a significant market share and maybe overtake Vodacom as its leader.