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Friday, October 13, 2006

Mobile coverage to increase by 20% in 2010 - GSMA

Remmy Nweke who was in Abuja

Approximated 60 per cent population of the sub-Saharan Africa currently have mobile coverage, which is expected to grow by 20 per cent in the next four years.

Director, Government and Regulatory Affairs at the Global System for Mobile Association (GSMA), Mr. Gabriel Solomon, gave this projection in an exclusive chat with ITrealms Online at the on-going conference tagged: “Connecting Rural Communities Africa 2006” taking place in Abuja-Nigeria.

“This would probably grow by 20 per cent by 2010,” he declared, stressing that close look at the population today, “there are 350 million that are covered by mobile but do not have connection.”

Government policies in the universal access coverage, he said, should be to lower barriers for people to get connected such as handset taxes, mobile service taxes, which prevent many consumers from affording and benefiting from mobile services.

He also noted that taxes on the continent when lowered would pave the way for more operators to take part in investing on the continent.

Further interconnection, he said, is a big issue Long Run Increment Cost (LRIC), as the best way to base interconnect regime, stressing that it is the best practices the world over.

The operators, he noted, are taxed not only at the federal level but also by the local and state governments among other government authorities.

Besides, he said, the importation taxes on equipment also increase the total cost of ownership (TCO).

Mr. Solomon also said that in many African countries, mobile operators are in the top-three tax payers’ group, “so there is no need for these other taxes.”

He argued that if import duties are to be lowered, “corporate tax may well increase,”highlighting that government should seriously review the tax policies on the continent.

He also cited an instance that in Nigeria, “the tax on consumer is probably around 10 per cent and Uganda its over 30 per cent whilst penetration is just 7 per cent.”

Stressing, “there is a correlation between high consumer taxes and low penetration.”

According to him, if government policies are to have people using mobile phones, they have to lower taxes.

“If you want the mobile usage to grow, slash taxes,” he declared.

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