News, views and commentary from the telecoms sector across emerging markets and developing countries worldwide

Saturday, 11 April 2009

East Africa: exchange of views (?) on taxes levied on mobile use

When I used to be involved in the organisation of telecoms sector conferences and exhibitions around the world, my marketing team worked hard to ensure that the events were attended both by reporters from international industry publications and by journalists from the mainstream news media of the host country. It was always quite gratifying to see copy about the presentations and discussions in the local vernacular in the days following the conference.

I imagine, then, that my former colleagues in the Com World Series team over at Informa Telecoms & Media may have been a little annoyed to see a round up of stories clearly emanating from the recent East Africa Com conference in Nairobi which failed to mention the event. Perhaps the host country's Daily Nation newspaper is not actually at fault here, having sourced the piece from Reuters.

Putting these gripes aside, I was interested to see that of the numerous points raised at the event by Vitalis Olunga (who heads up the GSM Association's African chapter), the Reuter/Daily Nation article led with his comments about taxes on mobile phone use.

Mr. Olunga, whose day job is with market-leading Kenyan cellco Safaricom, is quoted as saying that excise duty rates of more than 10% across Kenya, Uganda and Tanzania are too high. "If they reduce it, it will promote the usage of mobile. Rwanda has given us a good example where they introduced it at 3%," he told Reuters at a regional telecoms conference (this is the point at which the journos could have named the conference!)

Olungu said that a cut would also help cushion the sector from forecast falls in ARPU as the region increasingly feels the impact of the global financial crisis.

Susan Mochache, also spoke at the event, is an assistant director at the Communications Commission of Kenya. Ms. Mochache told Reuters her organisation expected tariffs to fall anyway due to growing competition.

I flew to Nairobi with the beginnings of a bad head cold. I got off the plane with somewhat impaired hearing as a result. So I may have missed some nuances of what was discussed at the conference. Even so, I am pretty sure that the exhange of views about taxes and tariffs which is implied in the Reuters/Daily Nation piece is not something that unfolded on stage...


1 comment:

  1. Tushar Maheshwari14 April 2009 at 12:42

    The problem in these countries is very high rate of taxes(30% in Uganda). Perhaps the only country where excise is levied on airtime. Apart fro this also the fact that interconnect is not regulated which makes in very difficult for a new entrant


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