Tanzania's Vodacom expects to invest around US$124 million in its network this year, but warned that rising taxes could hamper investment in the future.
The government has recently imposed a tax on all phone accounts and a tax on mobile money transfers.
Vodacom Tanzania's Managing Director, Rene Meza told the Reuters news agency that the company will "invest over 200 billion shillings in network expansion, data and M-Pesa,"
However, he warned that "The mobile industry in Tanzania is already heavily taxed. Additional taxes will definitely discourage investment particularly for rural expansion,"
The mobile networks had been due to impose a tax of Sh1,000 on every SIM Card, and a tax of 0.15% on each mobile money transfer.
The SIM Card tax has been put on hold for now. It has been feared that the higher taxes could slow mobile uptake in the country, where it is still just under the 50 percent mark.
The tax was expected to raise around US$130 million a year, for rural infrastructure developments, but was fiercely opposed by customers, forcing the government climb-down.
The biggest complaints about the new tax had come from the rural poor, who often spend less per month than the tax would have charged, effectively more than doubling their monthly phone costs.
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