By Business Insider Reporter
Tanzania’s use of public universal-service funding to extend mobile networks into commercially unattractive rural areas has emerged as a practical example of outcome-focused digital connectivity financing in Africa.
The Advancing Digital Connectivity in Africa: Charting Africa’s Path to 1 Billion Connected People by 2030 report identifies outcome-based public funding as one approach needed to reduce the cost of connecting rural and underserved communities.
Tanzania’s experience through the Universal Communications Service Access Fund (UCSAF) illustrates how such financing can be translated into physical network infrastructure and new customers for mobile network operators (MNOs).
By January 2026, UCSAF had completed 758 telecommunications towers, extending mobile and internet services to 1,407 previously unserved villages in 713 wards, with an estimated 8.5 million people benefiting. The project received about TSh126 billion in government subsidies.
The financing mechanism has involved both public funding and private-sector implementation. Yas built 261 towers, Vodacom Tanzania 190, Airtel Tanzania 169, TTCL 104 and Halotel 34. The operators were responsible for technical deployment, construction and operation, while UCSAF subsidies helped make investment viable in areas where normal commercial returns would be difficult to achieve.
“The 758 Communication Towers Project was implemented by the Government through the Universal Communications Service Access Fund (UCSAF) in partnership with telecommunications operators YAS, Vodacom, Airtel, TTCL, and Halotel. The project has extended communication services to more than 1,400 villages, enabling over 8.5 million people to access communication services. This has created greater opportunities in business, education, healthcare, financial services, and other social services through digital technologies,” UCSAF says on its website.
The project has also brought international recognition. On July 10, 2026, Tanzania received a WSIS Prizes 2026 International Award in Geneva for the 758 Communication Towers Project. The award was received by Communication and Information Technology Minister Angellah Kairuki. Tanzania was nominated in seven WSIS categories and won two awards.
“The 758 Communication Towers Project was officially launched by President Dr. Samia Suluhu Hassan on April 10, 2026, in Dodoma. Today, the project is internationally recognized as a model of success in bridging the digital divide, promoting inclusive participation in the digital economy, and accelerating the achievement of the Sustainable Development Goals through communication technologies,” reads the statement on the triumph.
How MNOs have benefited
For operators, the arrangement has reduced one of the biggest barriers to rural network expansion: the high upfront cost of serving sparsely populated or remote communities.
Airtel’s experience illustrates the opportunity. The company says its Tanzanian operation has participated in 18 UCSAF tenders since 2012, securing contracts worth about US$23.3 million that facilitated construction of 404 telecommunications sites. Airtel also reported contributing US$4.4 million in universal-service levies for the government financial year ending June 2024.
The model therefore creates a two-way mechanism: operators contribute to the universal-service system through sector levies and compete for subsidised projects, while successful operators receive funding that helps offset the cost of extending networks to areas that might otherwise remain commercially underserved.
Airtel Tanzania’s then Managing Director Dinesh Balsingh said in 2024 that the company had constructed 30 towers as part of the wider rural expansion programme, describing network expansion as part of its commitment to reliable communications services.
Vodacom has similarly benefited from UCSAF-supported network investment. Its FY2026 financial statements identify government grants relating to UCSAF projects, while the company reported TSh323.9 billion in capital expenditure during the year, largely directed towards network modernisation and IT-platform upgrades.
The commercial benefit extends beyond voice connectivity. Once a subsidised tower becomes operational, operators can provide mobile internet, mobile-money and other digital services, potentially creating new revenue opportunities while connecting previously excluded communities.
Yas has also highlighted the broader commercial importance of network investment. Chief Executive Officer Pierre Canton-Bacara has described connectivity as a foundation for expanding digital opportunities, while the company says it has invested more than TSh1 trillion in network infrastructure over four years.
For UCSAF, the project demonstrates the value of tying public financing to measurable infrastructure and connectivity outcomes. Former CEO Peter Mwasalyanda, who now heads TCRA, said completion of the 758 towers showed the potential of collaboration between government and telecommunications providers to extend services to rural and peripheral areas.
The project’s international award reinforces that outcome-based approach. The towers have expanded the reach of communication services while creating opportunities for business, education, healthcare and financial services in communities previously outside network coverage.
According to the report, the next challenge is to build on the physical network by ensuring newly connected communities can afford smartphones and data, acquire digital skills and use connectivity for productive economic and financial activities. That shift – from connecting villages to enabling digital participation – will determine how much economic value Tanzania extracts from its universal-service investmen, GSMA argues.
