At the Mobile World Congress held in Kigali last week, top telco executives have called upon African governments to restructure their tax policies. One of the calls from the CEO’s was for African governments to do away with taxation of low-cost smartphones. In a continent, there are 489M unique mobile subscribers in 2023, indicating a 43% penetration rate. Data from the GSMA shows that 287 million people in Africa can have access to internet enable phones.
The Six CEOs are Segun Ogunsanya, Airtel Africa Group; Hassanein Hiridjee, Axian Group; Frehiwot Tamru, Ethio Telecommunications; Ralph Mupita, MTN Group; Jerome Henique, Orange Middle East and Africa; and Shameel Joosub, Vodacom Group. The executives believe favorable tax policies will lead to digital development, deepening digital and financial inclusion.
Financial inclusion gains made by Mobile money in the continent could be wiped out. This is due to what consumers feel are punitive high taxes. In Kenya, businesses are now moving back to cash payments after consistent year on year growth in mobile payment adoption.
The telco executives would also like African government to update industry regulations to catch with the current trends. MTN Group CEO Mr. Mupita opines that the current regulations worked when Africa was transitioning from voice to 2G and 3G technology. For example, the Kenyan industry regulator, Communications Authority of Kenya (CA) is yet to define standard fee for 5G License. Also, 5G spectrum is Kenya is yet to have dedicated bands, and is currently sourced from other bands.
Industry Consolidation
Telco markets across the globe are in a consolidation phase. The MTN Group CEO, would like the continent to develop policies that will foster partnerships and spur innovation. Observing industry trends like the merger of Three UK and Vodafone, he stated that is was not a must for an industry to have “four to five, or even six player markets”.
Calling for changes that are aligned with national targets while boosting investor confidence, the CEOs recommended quick changes so as not keep Africa behind as the rest of the world moves forward.
