In Summary Vodacoms revenue in the Tanzanian market in this first quarter of the 2012/13 financial year grew by an impressive 45 per cent, one of the best postings in Vodacoms businesses around the continent. Tanzania is emerging as a cash cow for telecom multinational Vodacom as its revenues from the South African market shrink, a new report shows. Lower interconnection rates and increasing competition from its rivals including MTN has eaten into Vodacoms market share in South Africa, but its Africa-wide operations have come in strongly to plug the revenue gap, driven largely by strong growth in data services. The report by Bank of America, Merrill Lynch shows that Vodacoms revenue in the Tanzanian market in this first quarter of the 2012/13 financial year grew by an impressive 45 per cent, one of the best postings in Vodacoms businesses around the continent. Only Mozambique performed better, at 60 per cent revenue growth. According to the analysts, price recovery and significant growth in data has brought in most of the cash the companys revenue from data in its Africa operations more than doubled in the past financial year, posting a 150 per cent growth rate. Nearly half of all Tanzanian mobile subscribers are on the Vodacom network a 47 per cent market share. Its closest rivals are Airtel, with a 27 per cent market share, and Tigo with a 21 per cent market share, according to data from Tanzania Communications Regulatory Authority. We estimate Vodacom continues to take market share in most of its non-SA markets, the analysts say, projecting that growth in earnings before tax in the companys Africa-wide businesses should improve from 20 per cent in the past financial year to 25 per cent this year. Share This Story Share Vodacoms performance at home has taken a beating with a cut in the mobile termination rate (MTR) the cost of calling across mobile networks pushing down prices by 26 per cent. Still, the analysts report that Vodacoms revenue from voice was surprisingly resilient, posting a 1.5 per cent growth, but growth in data revenues slowed significantly, posting a 10 per cent year-on-year growth compared to 18 per cent last quarter. The company would do well to boost its non-South Africa businesses last month, investment analysts Investec Asset Management advised Vodacom it should accelerate its African expansion if it is to narrow the gap with MTN, which has capitalised on Vodacoms sluggishness to build a business three times larger. MTN has 173 million users across 21 countries in Africa and the Middle East since the company began in 1994. In contrast, Vodacom, started that same year, has only managed to enlist 50 million subscribers, 60 per cent of whom are in South Africa with the rest in Tanzania, Lesotho, Democratic Republic of Congo and Mozambique. Vodacom has not entered a new market since it started operating in Mozambique in 2003. But rival MTN bought out Lebanese group Investcom in 2006 for $5.5 billion to gain customers in Sudan, Guinea, Benin, Guinea Bissau, as well as Afghanistan, Syria and Yemenmaking it the largest mobile operator in Africa and the Middle East. Other companies which present a formidable challenge to Vodacom in its Africa-wide market include Bharti Airtel, which in 2010 bought the African assets of Zain, Kuwaits largest mobile phone operator, giving the New Delhi-based company operations in 16 African countries with 50 million subscribers, according to its website. France Telecom, too, is a company that has been looking to expand its market share. Its Orange brand has operations in 18 African countries with an estimated 66 million users, though nearly half 32.9 million are in Egypt alone, according to the companys website.