Dissertation (MA Development studies)There are limited employment opportunities in formal sectors in Africa and Tanzania in particular, and that the number of people engaged in informal sectors as daily source of income generation is increasing. In addition informal sector consists of small scale units engaged in production and distribution of goods and services with the primary objective of generating income. This study was conducted to examine how mobile phone vending services contribute to poverty reduction among mobile phone vendors in Tanzania, a case of Dodoma Municipality .The specific objectives included to determine effectiveness of the type of mobile phone services provided by different companies, to determine the effectiveness of the vending process, to determine the benefits of vending services to poverty reduction, and to determine challenges and suggestions for improving the businesses. Data were collected through cross–sectional survey using interviews and questionnaires and used a sample size of 105 respondents, which comprised officers from the mobile phone companies in Dodoma urban. The data gathered were analyzed using Statistical Package for Social Scientist (SPSS Version 16) as well as content analysis. The findings indicate that, the leading mobile phone services vendors belong to Vodacom, followed by Tigo, Airtel, and Zantel. There were also vendors who provided a combination of these different mobile phone companies services. It is concluded that benefits obtained from vending mobile phone services, include provision of employment, increased income and increased in social capital network. It concluded that there is ineffective and inefficient of mobile phone services provision because of lack of working capital, reliable permanent work places, poor training and skills. Therefore, it is recommended that Mobile Phone Companies should provide a room for training their customers particularly, vendors on how to operate their business and promote skills for better services provision among vendors, and mobile phone service vendors should be used as formal employment rather than informal employment.