Assessing the Economic Benefits and Challenges of Tanzania’s National ICT Broadband Backbone (NICTBB

International Journal of Information and Computer Science Volume 2 Issue 7, November 2013

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Assessing the Economic Benefits and Challenges of Tanzania’s National ICT Broadband Backbone (NICTBB) S.M. Pazi1 , C.R. Chatwin2 Department of ICT Business Solutions Development, Institute of Finance Management Dar es Salaam, Tanzania 1

Industrial Informatics Research Group, Department of Engineering and Design, School of Engineering and Informatics, University of Sussex, Falmer, Brighton BN1 9QT 2

pazi@ifm.ac.tz; 2c.r.chatwin@sussex.ac.uk

1

Abstract The vision of the Tanzanian national ICT policy is for “Tanzania to become a hub of ICT infrastructure and ICT solutions that enhance sustainable socio-economic development and accelerate poverty reduction both nationally and globally”. To achieve this, Tanzanian National ICT Broadband Backbone (NICTBB) is being constructed using optical fibre technology that will connect all its regions and districts, giving them access to the 10,000 km-length national and regional broadband infrastructure as well as to the undersea fibre cables landing on its shores. Innovations in broadband backbone coupled with optical fiber technology have lowered the costs of providing ICT services to virtually any location, for example from an inner-city neighborhood to a rural village or to remote areas in other places of the world. In this study, quantitative and qualitative research have been applied to analyze data obtained from interviews, questionnaires and publications in order to assess the economic benefits and challenges of NICTBB since it became operational. Despite the economic benefits of NICTBB, the study found that there is still a role for the Tanzanian government to provide last mile connectivity solutions for rural areas to enable people to access the internet via the NICTBB, as well as to educate them on how to exploit and use broadband for economic development. Since constructing the NICTBB is only the first step toward realizing the potential benefits from broadband access, government should now ensure that it is accessible and affordable to rural area people so that majority of Tanzanians can be effective in utilizing the backbone in their daily activities, thereby enhancing economic development.

Keywords National ICT Broadband Backbone (NICTBB); Optical Fibre DWDM; SONET/SDH; Internet Services; E-services

Introduction Tanzania is constructing a National ICT Broadband Backbone (NICTBB) by utilising optical fibre technology

that will connect all its regions and districts, giving them access to the 10,000 km-length national and regional broadband infrastructure, as well as to the international submarines fibre optic cables (EASSY & SEACOM) for global connectivity. The implementation of the NICTBB is a part of Tanzania’s National ICT Policy (URT, 2003) developed in 2003 and then also acknowledged by the Government of Tanzania in the National Development Vision 2025, for its importance in enabling ICTs to accelerate achievement of the goals and objectives of the National Development Vision 2025: National Economic Growth and Poverty Reduction Strategy. The philosophy is for Tanzania to become a hub of ICT infrastructure and have a sustainable ICT infrastructure that will provide higher capacity and ICT services such as Internet, voice, videos and other multimedia interactions at an affordable cost to the majority of the people in the urban and rural areas of Tanzania. With this perspective, NICTBB was initiated to begin with Phase 1 that initially started in Feb 2009 and was completed in June 2010. NICTBB is divided into four phases (1-4); Phase 1 initially started in Feb 2009 and was completed in June 2010, while phase 2 started in August 2010 and was completed in March 2012 (Pazi et al, 2013). Phase 1 and 2 provide 7,560 km of optical fibre cable that have been connected to 21 regional and some district towns.

Phases 3 and 4 will connect all Tanzanian districts and villages, respectively. The total proposed optical fibre cables for the NICTBB is 10,000 km, which constitutes three rings; Northern, Southern and Western optical fibre rings (Pazi et al, 2013) (See figure 1 below).

NICTBB is land locked with neighboring countries i.e.

Kenya, Uganda, Rwanda, Burundi, Democratic Republic of Congo, Zambia, Malawi and Mozambique and is currently connected to two submarine cables

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(SEACOM AND EASSY cable) to provide international connectivity, as per figure 2.

FIGURE 1TANZANIA NATIONAL ICT BROADBAND NETWORK

FIGURE 2 AFRICAN UNDERSEA OPTICAL FIBRE CABLES

The National ICT broadband backbone (NICTBB) is implemented using three technologies: Dense wavelength division multiplexing (DWDM), Synchronous digital hierarchy (SDH) and Internet protocol (IP) (Pazi, 2009; Pazi et al, 2013). This means that NICTBB consists of three layers: physical media layer (duct fiber), an optical layer (DWDM), and a client layer (SDH and IP).

The optical layer is sandwiched between the lower

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physical media layer and upper client layer. The optical layer performs several functions, such as multiplexing wavelengths, switching and routing wavelengths, and monitoring network performance at various levels in the backbone. The optical layer is normally decomposed into three sub-layers: an optical channel (OCh-P) layer, an optical multiplex section (OMS) layer, and an optical transmission section (OTS) layer. The function of the optical channel layer is to provide end-to-end networking of optical wavelength channels to transparently convey the signal into client layers. The optical multiplex layer concerns networking of aggregate multi-wavelength optical signals. The optical transmission layer concerns the transmission of optical signals on optical fibre cable (Pazi et al, 2009). The DWDM network incorporated into NICTBB supports 40 wavelengths per fibre and each wavelength carries 10 Gb/s (Pazi et al, 2013); thus enabling a single fibre to carry four hundred gigabits of information. SDH (synchronous digital hierarchy) transmits high-speed data streams of various bandwidth capacity to the backbone e.g. STM-1 (155 Mb/s), STM-4 (622 Mb/s), STM-16 (2.4 Gb/s), and STM64 (10 Gb/s) by the use of a time division multiplexing (TDM) scheme. In this way, SDH is customized into NICTBB to transmit standard interfaces for STM-1, STM-4, STM-16 and STM-64 direct to the service operators. NITBB has adapted the transmission of IP over SDH over DWDM, in which IP packets (i.e.

Internet traffic) are encapsulated and then transmitted by a router with either fast Ethernet (FE) or a giga Ethernet (GE) port directly over SDH then to the DWDM optical layer (Pazi et al, 2013). The SDH network provides end-to-end services and an efficient mechanism to multiplex/demultiplex lower-speed connections into service operators or from the DWDM network respectively. For example, low-speed Internet traffic of 2 MB/s can be multiplexed/demultiplexed into or from a 10 GB/s data stream respectively over the DWDM network (Pazi et al, 2013). Moreover, the protection mechanisms employed in SDH networks ensures that the service is restored immediately in the event of failures. The key network element of SDH is add/drop multiplexers (ADM). Hence, the SDH ADM operates as the regional network distributors, and is normally installed at the edge of the DWDM network for grooming traffic at the low bit rates to ensure that transmission is cost effective. In this context, the DWDM network takes the standard data signal directly from either SDH or IP and converts each data signal to a wavelength channel (Pazi et al, 2009; Pazi et al, 2013). These channels are then combined and

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transmitted onto a fibreoptic cable. At the telecomm operators, the reverse process takes place; and wavelength channels are converted directly to SDH or IP data signals (STMx, FE or GE) (Pazi et al, 2013).

NICTBB operates as the wholesale business concentrating on large capacity interfaces of STMx to service operators. NICTBB is managed and operated by the Tanzania Telecommunications Company Limited (TTCL) on behalf of the Government of United Republic of Tanzania through the Ministry of Communication Science and Technology (MCST). The telecomm operators connected into NICTBB acquire STMx from NICTBB and resell them to Internet service providers who provide Internet services to consumers.

These service operators in Tanzania who have been connected to NICTBB are TTCL; Airtel; Tigo; Zantel and Simbanet. With this approach, users access the Internet through service operators who are in turn connected internationally through submarine optical cable. NICTBB represents the beginning of a new era of connectivity for the Tanzanians, promising greater international bandwidth, more reliable connectivity and sustainable economic development. However, there are significant requirements to be addressed to sustain ICT services particularly in rural or underserved areas. For example, (Artulo and Juan, 2010) revealed that the inherent characteristics of the low demand from rural areas with low purchasing power, poor electrical power supplies and small capital income impede the last mile connectivity to the backbone. In addition, (ITU, 2007) noted that Internet access is not just about availability but the cost effective usage. The high cost of Internet access is still a barrier for people living in rural areas due to their low income, despite the government’s efforts to push down the bandwidth costs. This is in parallel with (Sheriff, 2009) who revealed that the biggest and most fundamental factor limiting Internet access in Tanzania is affordability, in which he stated that the cost of communication services remains comparatively higher than rates enjoyed in so-called developed markets.

Contrary to this, the cost of mobile services has fallen considerably since its introduction to Tanzania in 1995.

Although interconnection fees, taxes and import duties still hamper the cost of such services due to 20% import duty, 20% VAT and 7% excise tax for telecoms equipment added to mobile subscription costs, they are still very popular. The economic benefits from the Tanzanian national ICT broadband backbone have not yet been fully optimised. Therefore this paper aims to understand the gaps by examining economic benefits and challenges following construction of the

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Tanzanian national ICT broadband backbone.

Related Literature The explosive growth of the Internet and bandwidth intensive applications such as video-on-demand (for example, a movie located at some remote site is selected and watched online) and multimedia conferencing (which requires setting up high bandwidth connections between different users, for virtual meetings, and guaranteeing the desired qualityof-service (QoS) levels, low latency, and reasonable packet loss rate for the virtual meeting) require high speed ICT broadband backbones such as an optical network to provide high bandwidth. Optical networks are lightwave systems that use high frequencies (100 THz) in the near-infrared region of the electromagnetic spectrum, and employ optical fibres for data transmission (Agrawal, 1997; Mukherjee, 1997; Ramaswami and Sivarajan, 2002; Kaminow and Li, 2002). Optical fibre technology provides vast amounts of information for every resident, as well as access to schools, universities, hospitals and community centres.

An optical network uses optical fibres for data transmission; which is more secure than other data transmission systems e.g., satellites which suffer from tapping (as light does not radiate from the fibre, it is nearly impossible to tap into it without detection). It is also immune to interference and crosstalk. The optical fibre also has potentially limitless capability, huge bandwidth (nearly 50 terabits per second) (Tb/s), low signal loss (as low as 0.2 dB/km, low signal distortion, lower power requirement, low material usage, small space requirement and it is secure. The first-generation optical networks (i.e. SONET/SDH) used optical fibre as a replacement for copper cable to get higher capacities, as well as to provide lower bit error rates (Ramaswami and Sivarajan, 2002). SONET is the optical network technology used to transmit highspeed data streams in North America. A similar standard to SONET but which has been adopted in Europe, Japan and in developing countries is called SDH. SONET/SDH employs a TDM multiplexing scheme. The basic transmission rate defined in the SDH is 155.52 Mb/s abbreviated to 155 Mb/s and is known as a synchronous transport module level 1 signal or simply STM-1 (Ramaswami and Sivarajan, 2002). Higher rates of STM-4 (622 Mb/s), STM-16 (2.4 Gb/s), STM-64 (10 Gb/s), STM-256 (40 Gb/s) are also defined by ITU-T [15]. In SONET the lower rate of 51.84 Mb/s forms the first level signal STS-1. SONET hierarchy uses the term synchronous transport signal

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(STS) to define the equivalent of an STM signal (Note that an STS is an electrical signal). The optical interfaces corresponding to the STS-1 rate is called OC1 (optical carrier-1), and similar optical interfaces have been defined for OC-3, OC-12, OC-48, OC-192, and OC-768 corresponding to the STS-3, STS-12, STS-48, STS-192, and STS-768 signals. The SDH and SONET data rates are compatible; and an STM-1 data stream is equivalent to an STS-3/OC-3 stream. The second generation of optical network technology called the wavelength division-multiplexing (WDM) network (Agrawal, 1997; Mukherjee, 1997Ramaswami and Sivarajan, 2002; Kaminow and Li, 2002) began with wavelength division multiplexing (WDM), which arose to provide additional capacity on SONET/SDH networks. The term WDM was once used to signify the use of 2 wavelengths per fibre; nowadays, it is used to refer to more than one hundred wavelength channels per fibre (Agrawal, 1997; Mukherjee, 1997Ramaswami and Sivarajan, 2002; Kaminow and Li, 2002). A secondgeneration of optical network technology (i.e. DWDM networks) incorporates the routing and switching functions into the optical layer that is performed by electronics in SONET/SDH networks (Ramaswami and Sivarajan, 2002). DWDM networks provide enormous bandwidth with minimum costs compared to SONET/SDH networks (Pazi et al, 2010). DWDM provides virtual fibres, in the sense which makes a single fibre look like multiple “virtual” fibres, with each virtual fibre carrying a wavelength channel. A DWDM network multiplexes many wavelength channels and is capable of providing data capacity in excess of hundreds of gigabits per second over thousands of kilometers in a single mode fibre (Pazi et al, 2008; Pazi et al, 2009). In addition, DWDM networks can support more than 100 wavelengths per fibre, thus enabling a single fibre to carry several terabits of information. DWDM network provides many benefits such as scalability capacity, transparency, and survivability (Ferreira et al, 2002). Optical DWDM networks have revolutionized long distance data transport and have resulted in high capacity data highways, cost reductions, extremely low bit error rate, and operational simplification of the overall ICT broadband backbone (Ferreira et al, 2002; Saleh, 2003; Chan, 2006; Zhu, 2003; Sengupta, 2003; Livas, 2005; Ruffin et al, 2008; Pazi et al, 2010). In this regard, DWDM networks have gained strong support for ICT broadband backbone solutions and are capable of delivering high bandwidth in a flexible manner where and when needed rather than other telecommunication

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network technology. ICT Broadband backbone is a key driver of economic growth, providing a boost of 1.38 percentage points in GDP growth in developing countries, for every 10-percentage-point rise in penetration (World Bank, 2009). Indeed, investment in ICT broadband also has the potential to deliver social benefits, for example by improving public service levels in areas such as health, education, e-government, and democratic participation at lower cost than would be available offline (Bilbao-Osorio et al, 2013).

Furthermore, an analysis for the European Commission estimates that broadband can create more than two million jobs in Europe by 2015, and an increase in GDP of at least EUR 636 billion (ITU/UNESCO, 2011).

Similarly, a study in Brazil reported that broadband added up to 1.4% to the employment growth rate (Inter-American Development Bank, 2009). In China, every 10% increase in broadband penetration is seen as contributing of an additional 2.5% to GDP growth (Value Partners, 2009). In Thailand, where in 2010 only some 3% of households had broadband and 12% of individuals, it has nevertheless been forecasted that if broadband is promoted, it could add 2.4% per cent to the country’s GDP growth rate (Digital Divide Institute, 2010). Similarly, a study by Booz & Company (2009) found that “10% higher broadband penetration in a specific year is correlated with 1.5% greater labour productivity growth over the following five years.”

This article also suggests that “countries in the top tier of broadband penetration have exhibited 2% higher GDP growth than countries in the bottom tier.”Another study by McKinsey (2009) estimated that “a 10% increase in broadband household penetration delivers a boost to a country’s GDP that ranges from 0.1 percent to 1.4 percent.” Similarly, research by Kowero (2012) found that a fiber broadband backbone leads to a significant annual increase in gross value added (GVA) and creation of jobs through business startups and improved business performance in rural areas, towns and cities in the UK. Also another report

by McKinsey (2009) published that additional GBP 5 billion investments in broadband networks in the UK would create or retain an estimated 280,500 UK jobs for a year. Optical fibre technology has the potential to provide many additional benefits in terms of cost and performance over any other communications network technology. For example, the construction of the Kenyan backbone by the use of optical DWDM technology has ended the country’s reliance on limited and expensive bandwidth from Satellite technology. It also has revolutionized the country’s internet and

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broadband sector and reduced the wholesale bandwidth prices by more than 90% (Kowero, 2012).

On the other hand, the construction of the Rwandan national fibre backbone has gradually reduced the international bandwidth charges from USD 2,500 per Mbps before 2009 to USD125 per Mbps in 2012; this cost will fall further as the number of subscribers increases (Newtimes, 2013).

Methodology A survey research design was adopted in this study to enable generalization of the findings. A structured questionnaire was distributed to households/ individuals who live in several rural areas in Tanzania where Internet is accessed though NICTBB connections, so as to assess the challenges and potential economic benefits of national ICT broadband backbone since becoming operational. Unstructured interviews were used to collect primary data from senior officers in public and private organizations to find the benefits of using internet through NICTBB connections. In addition to the questionnaires and the unstructured interviews, a review of the literature from the above organizations and other sources, for example: newspapers, ICT journals, copies of letters, minutes, meetings and websites, as well as observation from site visits was undertaken to supplement information collected through interviews. A purposive sampling technique has been applied to select senior officers from various public and private organizations for interviews. While an accidental sampling technique was used to select households/individuals from rural areas who were willing to participate in this survey.

Quantitative and qualitative data analysis using MS excel and Atlas.ti respectively was applied in this study to analyze primary and secondary data.

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reduction. Accordingly, the cost of mobile internet services and accessing wired Internet services has also declined by approximately 40 per cent (Pazi and Chatwin, 2013). Internet bandwidth cost per annum for leasing a STMx has also reduced by more than thirty percent (30%) in 2012) (Pazi et al, 2013). From this perspective, the internet penetration rate was increased from 1.3% in 2008 to approximately 12% in 2012, as indicated in ITU Internet statistics (IWS, 2013) as per table 1 and figure 3 below. Table 1 shows the penetration trend since year 2000. However, Tanzanian penetrations compared to other East African countries such as Kenya and Uganda are still low, since Kenya and Uganda penetration rates stand at 28% and 13% respectively (IWS, 2013), as per figure 4 below.

TABLE 1 TANZANIA INTERNET USAGE (SOURCE, IWS)

Year 2000 2002 2005 2009 2011 2012

Users 50,000 500,000 820,000 520,000 4,932,535 5,629,532

% Penetrations 0.3 % 3.6 % 6.7 % 1.3 % 11.5 % 12 %

FIGURE 3 TANZANIAN INTERNET PENETRATION RATE (%)

Findings Following thorough analysis of the primary and secondary data by using quantitative and qualitative methods, it was found that Tanzania’s Internet sector has remained underdeveloped due to the limited reach of the traditional fixed-line networks and the lack of international fiber connections until the construction of NICTBB took place with its connection to the international submarine optical fiber cable via the SEACOM and the Eastern African Sub-Marine cable System (EASSy) in July 2009. This has resulted in the international bandwidth cost being reduced from $1,500 per Mbps to $180 per Mbps (Stefanotti, 2010), which is equivalent to an eighty eight percent [88%]

FIGURE 4 INTERNET PENETRATION RATE FOR TANZANIA, KENYA AND UGANDA

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Similarly, the Mobile network subscriber’s penetration has grown dramatically since its establishment in Tanzania. The mobile sector has resulted in growth of mobile phone users from less than 100,000 users in late 1990s to about 27,598,689 million users in March, 2013 (TCRA, 2013), which translates to around 61% of teledensity (penetrations), as per table 2 and figure 5 below. Table 2 also shows the mobile penetrations rate since 2005. The major mobile operators are Vodacom, Zain, TiGO and TTCL-mobile, Zantel-mobile and Sasatel. Mobile phones are the only ICT service, which have good market penetration in rural areas.

TABLE 2 MOBILE SUBSCRIPTIONS AND TELE-DENSITY (SOURCE, TCRA)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 (March)

Users 2,963,737 5,614,922 8,486,126 13,130,602 17,642,408 21,158,364 25,827,518 27,627,156 27,598,689

% Penetrations 10% 15% 21% 32% 43% 50% 59% 61% 61%

FIGURE 5 TANZANIAN MOBILE PENETRATION RATE (%)

TABLE 3 FIXED SUBSCRIPTIONS AND TELE-DENSITY (SOURCE, TCRA)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 (March)

Users 154,420 152,644 163,269 123,809 172,922 174,511 161,063 176,367 169,786

% Penetrations 0.52% 0.41% 0.40% 0.30% 0.42% 0.41% 0.36% 0.39% 0.38%

The penetration of fixed-line (telephone) does not seem to grow exponentially as shown in table 3 and figure 6.

Two government telecoms operators (TTCL and Zantel) provide fixed Telephone lines. This shows that most users prefer to use mobile phones to access the internet instead of wired or wireless infrastructure technology due to the sparse availability of these technologies, as well as the higher costs of purchasing equipment and internet connection charges.

Creation of New ICT Services and Products The increase of ICT penetration rate as discussed above has facilitated the creation of new business services and products i.e. Mobile data and 3G broadband services have been launched by mobile operators since the commencement of NICTBB. Mobile voice services offered are Bongo Phone, Prepaid Services, Prepaid Calling Card, Post Paid Services, Rafiki Public Phone, and TTCL Mobile (TTCL, 2013). These services have made mobile operators leading players in the voice and data services including the Internet. In addition, other Internet services that have been established are wireless broadband; Mobile Internet; and Virtual Private Network (VPN) that provides secured and dedicated end-to-end data connectivity to multiple sites in different geographical locations with scalable and guaranteed bandwidths of 64 Kbps to 100 Mbps.

In addition, video conferencing services have been used through NICTBB connections by various government organizations such as Tanzania Global Learning Agency (TaGLA) to conduct online courses, seminars, workshops, meetings and interviews.

Provision of E-services

FIGURE 6 TANZANIAN FIXED-LINE PENETRATIONS RATE (%)

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The bandwidth capacity of NICTBB has provided and sustained the delivery of e- services such as e-money, e-commerce, e-banking, e-education and e-government, e-health, e-business, e-tourism and e-agricultural (Pazi and Chatwin, 2013). For example, the majority of Tanzanians nowadays, especially living in urban areas, can afford wireless devices such as mobile phones or smart phone/tablets to make cheap calls, send SMS,

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access Internet services or use m-facilities such as emoney/m-banking provided by mobile operators to send or transfer money. The same as the use of e-health, Tanzania Telecommunication Limited (TTCL) in collaboration with Kilimanjaro Christian Medical Centre and Bugando hospital are offering telemedicine services through NICTBB, whereby sound and pictures of the patient are being sent to experts in other parts of the world for further analysis without the patient being physically transferred to these places (Guardian, 2013).

This has cut down the patient costs for treatment and travelling to hospitals abroad, etc. Similarly, diagnosis and prescription are done electronically saving transport costs for patients/doctors to travel from their premises or working places to meet the patients or the doctors respectively. In addition, the use of eeducation has facilitated access to learning and teaching materials, and facilitated online classes. This has reduced administrative costs and increased work efficiency by deploying fewer teachers for attending a big number of students seated in different locations all at one time. Furthermore, e-banking has helped customers to be proactive at their workplace instead of wasting travelling time and costs to their respective bank or company to check balances or pay bills; and these services can now be provided electronically.

Creation of New Business and Jobs The operation of NICTBB has also opened doors for new businesses to be created in order to support these new ICT services. For example, several new businesses and jobs have been created to cope with new ICT services such as e-banking, e-business, e-money, mbanking, e-education. As well, small and medium entrepreneurs (SMEs) in rural and urban areas have been established to provide e-money facilities such as Tigo pesa, M-pesa, Airtel money, etc for customers. In addition, several local web host companies have been created to provide cloud computing services in Tanzania. Likewise, NICTBB has also increased employment opportunities in Tanzania. For example, several workers were recruited to form an NICTBB unit within TTCL to deal with daily activity of the backbone i.e. Administration, Business, Marketing, Technical operations, etc. Furthermore, several workers including the chief executives officer (CEO) were employed in the E-Government agency to administer and run the daily activities of the agency.

Enhanced Work Productivity and Efficiency Besides the economic benefits indicated above, the

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deployment of NICTBB has enhanced work productivity and efficiency, thereby increasing the revenue collection by using M-facilities such i.e. emoney and m-banking (Pazi and Chatwin, 2013). The undergraduate admissions process in many academic institutions have been improved by using the Tanzania Commission of Universities (TCU) Central Admission System (CAS), whereby interested students apply online via mobile phones or computer using the system rather than physically visiting the institute in which they want to study. In addition, the Tanzania National council of examination (NACTE) has increased its efficiency in publishing examination results for primary school (Grade 7), and Secondary school “O” and “A” level results by going online following its connection to the NICTBB. The use of egovernment service has also facilitated the implementation of a full budgeting, accounting and fiscal control system that has underpinned significantly improved fiscal management by helping the country to curb unbudgeted commitments and expenditures and address the demands of its development partners. Additionally, the use of the Human Capital Management Information system (HCMIS) in (MDAs), LGAs and other government institutions in Tanzania has enhanced the speed of recruitment, evaluation and payroll processing for government employees.

Overseas Trades The virtual landing stations of the submarine cables through the NICTBB to cross-border points of Rwanda (at Rusumo station), Uganda (Mtukula station), Malawi (Kasumulo station), Zambia (Tunduma station) and Kenya (Namanga, Sirari and Horohoro stations) has resulted in overseas trades in communication services between Tanzania and neighbouring countries.

Challenges In contrast to the economic benefits indicated above, there are several challenges that need to be addressed so that NICTBB is fully utilized to its potential capacity.

For example, one major impediment is still the lastmile connectivity especially in semi-urban or rural areas, where the majority of people live [26]; this is despite the Tanzanian government’s efforts to allocate funds so that universal access services are deployed in rural areas and other underserved areas in Tanzania.

NICTBB is not deployed in semi-urban or rural areas due to the high capital investment and operation costs of the optical fibre networks. In addition, alternative

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last mile connectivity technologies such as wireless or fixed wireless networks are still scarce in semi-urban or rural areas, since telecommunication service operators are less attracted to invest due to the uncertainty of profits. Accordingly, Internet services in semi-urban or rural areas are still accessible through VSAT connections which are unaffordable for the majority of users who live in those areas. Another challenge is regulation of Internet services; and this is not yet formulated well in Tanzania. As a result ISPs take advantage by charging customers a high price to access Internet bandwidth, which becomes unrealistic and unaffordable to many Tanzanians especially those living in rural areas due to their low income. Also, the large costs for purchasing various Internet connection equipment or devices i.e. wired Internet leased lines, cable modem, wireless modem or laptop/computers are prohibitive due to the added VAT and tax, which creates another obstacle that limits users who cannot afford these equipment/devices, which they need to access the Internet through NICTBB. Another barrier for not utilizing NICTBB to its fully capacity is the lack of adequate and well designed guidelines and strategies for bandwidth utilization. As a result, most users are not aware of the importance and benefits of utilizing the broadband backbone. Well designed guidelines would facilitate a conducive ICT environment that stimulates demand for the users to make effective use of the broadband backbone to access relevant ICT services provided online. Also government institutions should serve as an anchor user for broadband backbone and migrate their own services and local content so as to drive market demand for ICT applications that are available online.

Additionally, as the wider use of the data accessible online through NICTBB become more transparent and open, it will bring new challenges, not least the need for the backbone to become more robust and resilient, and for ICT services to become more reliable. Issues of cyber security and data protection will come to the fore of NICTBB as security and trust become increasingly important in order to protect the data provided online.

Another major obstacle NICTBB faces is poor electrical power supply infrastructure that causes power outages in the whole country. Continuous power interruption limits the use of computer or internet connections as all the electronic equipment is powered up using electricity. Efficient power supply can only be guaranteed by power generators. However, it is very expensive to own generators due to the large acquisition costs, as well as operational costs as fuel is

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very expensive; which is a barrier to using computers to access the internet through NICTBB, especially for the rural areas population.

Conclusions The deployment of the NICTBB and its connections to submarine optical fibres has resulted in the reduction of internet bandwidth costs including international costs. Accordingly, the ICT broadband penetration rate for Internet, fixed and mobile network subscriptions have been dramatically increased. This in turn has resulted in the creation of new ICT services and products such as mobile Internet and voice services, which have been launched since the commissioning of the NICTBB. The delivery of e- services such as emoney, e-commerce, e-banking, e-education and egovernment, e-health, e-business, e-tourism and eagricultural has also become active since the commencement of the NICTBB. In addition, the operation of the NICTBB has opened doors for creation of new businesses and jobs as more ICT services and products have been established. In addition, the NICTBB has enhanced work productivity and efficiency in private and government organizations through the use of automated business services.

Furthermore, it has expanded its international market trade by connecting with its neighboring African countries. There are many positive economic benefits from the NICTBB, nevertheless, several challenges remain, such as, last-mile connectivity in semi-urban and rural areas; an internet services regulation framework; lack of adequate and well designed guidelines and strategies for bandwidth utilization of the NICTBB; cyber security; and poor electrical power supply infrastructure. All this must be addressed explicitly before NICTBB is fully and effectively utilized. Therefore, more activity by the Tanzanian government is needed to find last mile connectivity solutions for rural area people to link into the NICTBB, as well as to educate people on how to exploit and use broadband for economic development. Internet connection equipment or devices and internet bandwidth tariffs should be subsidised further by the government so that the majority of the semi-urban and rural areas people can afford the internet service. Since the broadband backbone is like a pipe that represents a well-known application for which market demand has been amply proven; which is a low risk strategy. In this regard, providing the infrastructure is only the first step towards realizing the potential benefits from broadband access but more government efforts are

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required to make sure that the NICTBB is accessible and affordable to every Tanzanian. This way the NICTBB in Tanzania will be an engine of growth as it will be embedded into the daily activities of people, whether in agriculture, education, financial, health or delivery of public services.

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Dr. S.M.Pazi is currently works with the Institute of Finance Management (IFM) in Dar es Salaam, Tanzania. His research interests include concepts, modeling, performance and economic aspects of optical DWDM networks with an emphasis on ICT broadband backbones.

Prof.C.R.Chatwin-FIET, MBCS, FIMechE, FInstP, EurIng, FRSA, MIEEE, CEng, CPhys, is Director of the Industrial Informatics research group at Sussex University. He has published 174 journal-papers and 269 conference-papers, 16 book-chapters, 2 books. During the last 15 years, he has attracted more than 14 million USD in research grant funding. His research completed and on-going is in fibre optic communications, sensor networks, SOA middleware design & implementation, goods track and trace, interoperability in the business and the health sector, mobile biometrics, embedded electronics. His research has been exploited in three spin-out companies.