TTCL failures: Why it was not a matter of if, but when

President Samia Suluhu Hassan recently called on the TTCL to reassess its future as a telecom operator, due to its inadequate performance in the market. This directive came after the CAG report, which highlighted significant losses and malpractices in many state-owned firms such as TTCL, Air Tanzania, TRL, and NDC.

“It is clear that TTCL has failed in the telecom business,” the president nonchalantly declared.

“They should focus on providing broadband services. In fact, if they engage in telecom and the broadband belongs to them, there is no fairness in competition.”

The directive shows that TTCL’s chickens have finally come home to roost. For years, observers have been urging TTCL to shift its focus from traditional mobile services to fixed broadband services, but TTCL ignored their advice while continuing to burn taxpayers’ money.

In 2010, I published an article in the Daily News entitled “What next for TTCL?” where I focused on that very argument. I was then working for the Chinese telecom solutions provider ZTE Corporation and I had the privilege of working on the TTCL account. Being enchanted by the then-latest fibre optic last mile technology, GPON, I was eager to showcase the countless possibilities on offer to TTCL. As a result, I valiantly advocated for its adoption, hoping to take TTCL to new heights. It was, sadly, an exercise in futility.

At that time, Tanzania’s economy was booming, fuelled by the breakneck expansion of sectors such as telecom, banking and construction. Competition was fierce, with Vodacom, Airtel and Tigo fighting it out for every subscriber. Operators were deploying new sites at a rapid rate, with Airtel breaking records by commissioning the most sites per month in its entire African group (called Zain then). The NICTBB initiative was also in the works. It is one of the best ideas our government has ever conjured up. Finally, two undersea fibre cables, SEACOM and EASSY, arrived in Tanzania, unlocking new possibilities for the industry. It was a magical time in the industry.

In Dar es Salaam, residents were witnessing skyscrapers going up like mushrooms. Thanks to the nationalisation of properties after the Arusha Declaration, the real estate market was severely underdeveloped. There was demand for 2 million apartments then and people were making up for lost time. So, in a short while, the skyline dramatically changed as developers competed to build new apartment blocks the fastest.

While that was happening, TTCL had a highly underutilised city-wide fibre metro network, capable of carrying tens of gigabits of data. With big institutions still subscribing to 1 or 2 Mbps, that was and still is a big deal. The metro gave TTCL a reach into Dar’s affluent neighbourhoods – from Bahari Beach, Mbezi Beach, Upanga, and Oysterbay to Masaki—a competitive advantage of the Brodnagian scale for TTCL.

For some reason, the gods of fate had fashioned a massive window of opportunity for TTCL. The increasing concentration of multi-storey buildings rapidly reduced the average cost of connecting subscribers; the entrance of EASSY and SEACOM significantly reduced the cost of international connectivity; and because of the expanding economy, more and more middle-income households could have made use of faster broadband and associated services.

Furthermore, despite the dismal performance, TTCL still commanded great respect. Its staff could enter any building without permission. In fact, many buildings already had communication rooms, meaning rooms dedicated to TTCL.

What did TTCL do to capitalise on all that? Nothing. Instead, TTCL decided to invest its meagre capital in 4G, a market in which it was remarkably ill-equipped to compete. Reviewing that, three years ago, I wrote, “Had TTCL done the right things, hundreds of thousands of households would have had access to fixed broadband, and IPTV and VoD would have been household terminologies. But, alas, instead of focusing on those low-hanging fruits, it is chasing 4G wild geese!”

Again, the chickens have come home to roost.

For decades, TTCL has been a comedy of errors. Indeed, if one wanted to learn how not to manage a telecom operation, reviewing TTCL’s history would be more than enough. Despite possessing huge assets and comparative advantages over others, TTCL has remained a lost cause. The Magufuli government went as far as making TTCL the sole provider of telecom services to government institutions and stacking its staff with army officers – yes, the regime was a treasure trove of bad ideas – but it was all to no avail. The fact is that even TTCL doesn’t want TTCL to succeed.

Refocusing TTCL’s strategy is crucial to its success. Indeed, TTCL has a unique advantage as a provider of broadband services and should focus on that. After all, TTCL lacks the wherewithal for success in the mobile sector.

That said, TTCL’s problems go far beyond its market strategy. Even with the perfect strategy, TTCL is beyond saving as long as the current political and operational environments persist. There is a reason why the vast majority of state-owned businesses, including TTCL, perform dismally. It is time for the President to rethink her government’s entire approach to the management of these organisations if she wishes them to succeed.