Vodacom Tanzania Plc has completed the purchase of Smile Communications Tanzania Limited for approximately 68.8 billion Tanzanian Shillings, equivalent to $26.6 million.

With this acquisition, Vodacom now holds ownership of Smile’s shares and operational resources, including important spectrum licenses.

As per the agreement, Vodacom acquired all of Smile’s issued shares at a price of 0.24144 Tanzanian Shillings per ordinary share.

The ownership transfer was finalized on April 3, 2024, following a major investment by Al Nahla Group, a Saudi Arabian investment fund.

The investment fund had injected over $235 million into the company for a rescue operation two years earlier.

The acquisition’s goal is to enhance Vodacom’s position in Tanzania’s telecommunications sector by enhancing its capacity to deliver technologically advanced 4G and potentially 5G services.

This move allows Vodacom to utilize Smile’s infrastructure, specifically its 800MHz and mid-band spectrum licenses, which are essential for providing high-speed internet services.

The 800MHz frequency allows for better coverage and penetration, especially in rural and remote areas where connectivity is often limited.

The mid-band frequencies provide a balance between coverage and capacity, making it suitable for delivering high-speed internet in urban areas with high user density.

Despite having only 15,171 subscribers, Vodacom sees value in acquiring Smile due to its pioneering work in introducing 4G LTE services in Tanzania.

Smile Communication was a leading innovator in Tanzania’s telecommunications industry when it introduced the 4G LTE mobile broadband service in May 2013.

Vodacom is merging Smile’s infrastructure with its network to expand its 4G coverage in key areas of Tanzania.

This move by Vodacom will improve network quality and expand coverage to underserved areas, bridging the digital divide and boosting economic growth through better connectivity.

Vodacom is also committed to improving its mobile services by investing in spectrum expansion through acquiring additional frequency bands like 700MHz, 2.3GHz, and 2.6GHz.

This will enhance the company’s network performance and capacity with a broader range of frequencies.

Vodacom initiated its strategic plan for acquiring spectrum even before, starting with a $10 million acquisition in 2018 through an auction for 20MHz in the 700MHz band.

This acquisition by Vodacom could boost competition in Tanzania’s telecommunications market, encouraging other operators to enhance their services in response.

Pula Secures $20 Million Funding for InsuResilience Expansion

With the potential for faster and more reliable 4G services, Tanzanian mobile users may experience improved connectivity and a better overall experience.

Vodacom’s positioning as a leader in the race for 5G deployment could give them a significant advantage in capturing the growing demand for advanced mobile technology in the region.

With this acquisition, Vodacom is set to consolidate and amplify its market presence across several key regions within Tanzania.

These regions include Pwani, Dar es Salaam, Morogoro, Dodoma, Mwanza, Mbeya, Kilimanjaro, and Arusha.

Before the purchase, Vodacom was the top player in the Tanzanian telecom industry, having 30% of all subscriptions.

By December 2023, Vodacom had a total of 19.1 million subscribers, showcasing its strong and leading position.

Tigo was the next biggest competitor with 28% of subscriptions, followed closely by Airtel at 27%, Halotel at 12%, and TTCL at 3%.

Looking ahead, it will be important to monitor Vodacom’s progress in integrating Smile’s infrastructure and how this will affect mobile data prices and service quality for customers.