Investing in the Tanzanian Telecommunication Industry

INVESTING IN THE TANZANIAN TELECOMMUNICATION INDUSTRY

• The process and procedures for acquiring license for internet service providers (ISPs) in Tanzania

There is no question that the Internet has taken on an increasingly important role in peoples’ lives. It doesn’t really matter a person’s station in life, his or her education, their income, or any other personal criteria — everyone today is affected by the Internet.

In Tanzania and world-wide, internet has had a major effect on education, the country’s economy and investment in general. The same is true for groundbreaking technology enhancing sectors such as medicine, engineering, law, and a host of other professional disciplines.

To take advantage of these technological advancement, internet access is needed, and even more, one needs high-speed Internet access. This is where Internet Service Providers (ISPs) come in.

Defining ISPs

ISPs are the people whose business is to get you online — be it by cable, satellite, phone line (DSL), fiber optics or through a wireless connection. Summarily, they provide services for accessing, using or participating in the internet. Today there are many major companies competing for ISP business in Tanzania. ISPs companies in Tanzania include RAHA-Internet Services, Africa Online, Spicenet Tanzania Limited, Tigo Internet, 1 & 1 Internet Solutions, SimbaNET, SMART and many more others.

From the foregoing, it can be certainly said that investment in ISPs business in Tanzania is growing in a fast pace rate as many companies are entering into the business. Breakthrough Attorneys, an Investment law firm is well equipped with abundant expertise and skilled lawyers who can make it easier for the prospective companies intending to venture in ISP business to get established. Breakthrough Attorneys, provides consultation services with regards to the laws, legal requirements, documentations and the whole process of Internet Service providers licensing procedures.

A. The laws governing Internet Service Providers (ISPs) in Tanzania:

There are many laws governing the ISPs business in Tanzania. However, the essence of this article is to give a handy outline of the licensing procedures that a company should pass through prior to being granted an ISP license. Therefore, the governing laws in this matter are;

i. The Electronic and Postal Communications Act, No.3 of 2011 and ,
ii. The Electronic and Postal Communications (Licensing) Regulations, 2011.

These two key legislation provides all legal requirements including the qualifications (conditions), required documents, the procedures to be adhered to, the license duration, and the fees entailed.

 

B. Forms of Internet Service Providers (ISPs):

Under Tanzanian laws, ISPs must be an entity (a company). The company may be organized in various forms such as commercial, community-owned, non-profit or otherwise privately owned.

 

C. Licensing as a mandatory requirement for ISPs:

In Tanzania, prior to venturing in ISP business, the prospective ISP Company should apply for a license to do so. A license is a door which provides access to the legal authority to engage in specified matters. The Authority in charge of all licensing matters is the Tanzania Communications Regulatory Authority (TCRA).

Types of Licenses, Generally;

The TCRA issues licenses depending on the type of service that the applicant intends to venture in. The licenses are issued upon an application being lodged, assessment of the applicant’s suitability in relation to the conditions under the laws and upon payment of prescribed fees.

These licenses are mainly categorized into two:

1. Individual Licence, and
2. Class Licenses.

Individual Licenses contain four sub categories which include:

i. Application Services Licence,
ii. Network Facilities Licence,
iii. Network Services Licence and
iv. Content Services Licence.

Class Licenses refer to licenses for:

• Importation, Distribution and Sale of Electronic Communication Equipment
• Installation and Maintenance of Electronic Communication Equipment, and
• Postal/Courier Services.

 

License for ISP

For a prospective ISP, the respective license that may be applied for are the Network Services License and the Application Services license. These licenses enable the company to provide Internet Services which include internet access, internet transit, domain name registration, web hosting, Usenet services, and colocation and so on. It should be noted that an Application Services license gives the licensee flexibility in engaging in a variety of application services provision which include public voice, message, Internet services, Internet Telephony (VoIP), pay phone, Value Added Services, Data services, Tracking services, financial services, gaming services, virtual applications services, and so on.

 

License Restrictions and Prohibitions

When TCRA issues a license, there are inalienable conditions which are attached to the license under the law. The following two major restrictions which are dominant;

i. It is strictly prohibited to transfer, assign or dispose the rights and obligations under the license without prior written consent from TCRA.

ii. Also prohibited to alienate in any way the license or any part of it thereof without prior written consent from TCRA.

Notwithstanding the above mentioned prohibitions, the licensee still enjoys full discretion to appoint agents or sub-contractors to enable him to efficiently exercise its rights and obligations under the license.

 

D. Requirements for a license applicant:

An applicant for an ISP License must show the following;

i. That they have a physical address in the United Republic of Tanzania

ii. In case of an applicant for Content Services License (Television and Radio broadcasting services) the shareholding structure must reflect that at least 51% is owned by a Tanzanian.

NOTE:

There is no specific requirement on the local or foreign share-holding percentage structure in the case of Network facility, Network Services, Application Services and Postal and Courier Services licenses.

 

E. Licensing Procedure, processes and relevant documentation:

The TCRA has put quite stringent and rigorous scrutinization procedures for all kinds of license applications. The Applicant is required to;

(a) Fill up an Application Form and pay up the prescribed application fee.

(b) The application fee depends on the coverage of the prospective network services. This means that the application fees differ depending on whether the license is for an international coverage, National, Regional, district or community-wise.

(c) The application should be accompanied by the following documents;

i. Application letter,
ii. Application fee receipt,
iii. Business plan,
iv. Certified legal documents of a company like Memorandum and Articles of Association, Certificate of Incorporation, Certificate of Compliance, Taxpayer Identification Number (TIN) Certificate and many others.

Upon lodging of the application together with all the required documents, the TCRA shall scrutinize the application to check whether all the required documents are authentic and submitted. Failure for the applicant to submit the required documents as requested by the authority will cause rejection of the application.

Appearance for presentation of business and technical plans

An applicant for individual licence must appear before the regulator on a specified date to make a presentation on business and technical plans pertaining to the proposed business and service to be offered. An application may be rejected if the applicant fails to appear at the authority when summoned to do so for presentation of the business plan unless prior notice has been issued by the applicant to the authority.

 

F. Approval or rejection of Application:

When an application has been approved by the Authority, the same will notify the applicant of the approval and issue an invoice for payment of an Initial license fee. Such fee should be paid within one month from the approval of such application otherwise the authority will reject the application. It should be noted that, the applicant may make a written request to an authority for extension of a further one month for honouring such invoice upon showing good cause. This request should be made prior to the expiry of the initial one month grace period. The authority will not extend the grace period further following the expiry of the extended period.

On the other hand, if the application is rejected, the Authority will notify the applicant of such rejection enumerating the grounds for such rejection thereof.

G. Duration and renewal of ISPs License:

Once a license has been approved and the Initial license fee has been paid, the Authority will issue an Application Services Licence to the successful applicant. Application Services Licence is divided into two:

i. Category A: With Network Facility and Network Service and
ii. Category B: Without network facilities and network services. The duration of such license depends on the territorial coverage of the services licensed for.

Durations for licenses in that regard are;

a) The duration for category A is 10 years for national and International Application Services Licence, and 5 years for regional and district licence category.

b) For Category B the duration is 10 years for International market segment and 5 years for national and regional market segment.

Once the license has expired it is renewable for another duration just like the original duration granted earlier. It should be noted that, an application for renewal of an ISP licence should be lodged 12 months prior to the date of expiry of the licence. Moreover, the licence may be renewed as many times as the applicant wishes as long as the same is complies with the laws governing ISPs.

 

H. Conclusion:

Internet Service Providers (ISPs) have played an important role in the advancement of mankind and overall development of Tanzanian economy as well as access to the world. Tanzania has readily opened doors for the telecommunication sectors investment and the number of licensees having grown exponentially in the past 10 years. For example currently there are 21 licensed Network Facilities Operators (all registered from 2005); 17 Network Services Licenses, 80 Application Services Licenses and with regards to Content Service Licenses, 84 Radio Broadcast Services and 26 Television Broadcasting Licenses.

The big question however threatening the growth of the telecommunication industry in the country is the enactment of the new Cybercrimes Act, 2015 which for a large extent interferes with data and content usage of the telecommunication channels and devices.

With this in mind, Breakthrough Attorneys as a reputable firm of professional Attorneys is at the frontline in providing legal guidance on the licensing process for prospective ISPs as well as offering the legal authority to engage in telecommunication investment and a key mode of entry for firms considering national and international expansion in the telecommunication industry.

Disclaimer:

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.