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How desirable is 5% Excise Duty on Telecom Services?

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By Ibrahim Dan Halilu

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has thrown Nigeria into another controversy amidst plans to launch the 5G network, which is expected to transform every sector and sphere of life of the citizenry.

Telecom

Coming at a time when Nigeria warming up to launch the largest high speed mobile network technology (5G) in Africa, the 5% excise duty on telecom services being implemented by the Federal Ministry of Finance and the Nigeria Customs Service, is not only a negation of the laudable gains of the Buhari administration in the telecom sector but another incontrovertible proof of the administration’s poor policy coordination.

The expectation of most Nigerians is that the Finance Minister and the Controller General of the Nigeria Customs Service who are the prime advocates of the 5% excise duty will engage with the Ministry of Communications and Digital Economy under whose purview the telecom sector presides, and the Nigerian Communications Commission (NCC) which is the telecom sector regulator, to create a synergy before rolling out the new tax regime.

It is no brainer to understand the imperative of engaging with these two government institutions whose role is central to all that the administration has achieved in that sector.

The NCC has over the years implemented various initiatives and programmes that have stabilized the telecom sector and created a very healthy environment for the industry to thrive and offer quality and affordable service to Nigerians.

The commission’s declaration of 2016 as the Year of the Telecom Consumers has placed premium on the consumer as king who should be treated with respect and offered value for money.

Conversely for the mobile network operators who enjoyed massive support of the Commission disputes resolution, protection of critical telecom infrastructures, and restoration of operational facilities that enhance better performance of the industry.

The Commission has played a very strategic role in resisting arbitrary hike in tariffs and other charges for telecom services which can impose additional burden on the consumers. Instead, the NCC envisions a new tariff regime that has not only reduced the cost of data by more than 100% but further increased access to telecom services in Nigeria.
Its robust National Broadband Policy 2020-2025 is aimed at achieving a new landmark in telecom operations in Nigeria as it rolls out the 5G technology that will change the way of doing almost everything.

Similarly, the Ministry of Communications and Digital Economy through its indefatigable minister, Prof. Isa Ali Pantami has launched Nigeria on the world map of countries that are transiting from analogue to digital economy with the unveiling of a robust policy on 5G Network and Digital Economy.

These are commendable efforts that should be complimented by the Federal Ministry of Finance and Nigeria Customs Service (NCS) through advocacy for a downward review or complete removal of some of the tariffs imposed on the MNOs and other service providers.

The presidential inauguration of a 27-person committee charged with the teak of exploring ways of improving Nigeria’s ranking on the Ease of Doing Business, should have been followed by an aggressive drive of the Federal Ministry of Finance to streamline some of the regulatory measures that hinder the effective performance of the industry such as multiple taxation, and promote policies that will remove barriers to consumer adoption of the new technology.

It is on this note that one wishes to appeal to the Minister of Finance to exercise the power conferred on her by the Finance Act 2020 with caution and empathy to the Nigerian consumers who are already overburdened by new series of taxes introduced by the Buhari Administration.

The Minster needs to find equilibrium between government’s desires to raise more funds and citizen’s expectations for better welfare as the destabilizing effects of the new tax regime outweigh its monetary benefits both to the economy and the citizens.

Firstly, the policy will reverse the gains recorded by the NCC in reducing the cost of telecom services to the consumer and efficient service by the Mobile Network operators (MNOs) who have to contend with multiple taxations and increased operation costs.

Secondly, the new policy may further have adverse effect on the flow of both foreign and local investment in the broadband infrastructure that is needed to scale up the deployment of 5G network to other cities across the country. The MNOs are already groaning under an indiscriminate multiple taxation policy that make is harming their business.

The greatest damage the new tariff will do to Nigeria’s telecom sector is derailing the rollout and total adoption of the 5G network that is being test run by the major telecom service network, the MTN whose competitor, Mafab has already announced an extension of the 5G launch to end of the year due to unforeseen challenges.

The Federal Government’s policy on 5G Spectrum for Digital Economy driven by the Ministry of Communication and Digital Economy may suffer a setback under the new harsh tax regime that targets the telecom sector as a major revenue earner for government.

The imposition of the 5% excise duty will be an additional burden on small businesses and individuals who wish to take advantage of the benefits and opportunities offered by the 5G network to expand and improve their businesses as they may face a new tariff regime.

Another possible consequence of the new tax regime is retarding the progress made in launching Nigeria into the open governance platform that promotes transparency and accountability, while enhancing citizens’ participation in governance as any increase in tariff will lead to low patronage of the telecom services.

It is my candid view therefore that the introduction of 5% excise duty on telecom services is both untimely and undesirable for Nigeria whose majority citizens are living below poverty margin, and have no visible source of income.

The Federal Ministry of Finance and the Nigeria Customs Service should dissipate more energy on initiating people-centred policies that will support the NCC in performing its regulatory functions instead of frustrating the laudable efforts of the commission to promote affordable and efficient telecom services in Nigeria.

The duo should regard themselves as a part of the same government that enunciated the policy of promoting digital economy through universal access to telecom services for Nigerians instead of a separate entity that competes for space or attention.

In her search for new avenues to improve government revenue, the Finance Minister should look beyond imposing excise duty on telecom services, and engage with the public and other stake holders to explore other options that are richly available.

The government can tilt the scale towards diversifying its revenue generation to imports for luxury items, luxury life-styles, and reducing the cost of governance at different levels. There are many wasteful spending that can be scaled down to save money for government to meet its financial obligations which is the main thrust of the Minster’s argument.

These include the purchase of exotic vehicles for public office holders, foreign travels, high duty allowances, and foreign trainings for public officials. Others are blocking the conduit pipes and confronting corruption head on.

These and many others will spare a huge sum that can be channeled to more productive projects that will impact on the lives of the people.

The rush to impose new tax regime on consumers of telecom services will be self-defeating, if at the end of the day the only benefit it accrues to the government is more money to spend instead of better welfare for citizens.

The telecom services are no longer a luxury but necessary tools that Nigerians need to connect with the rest of the word, share their ideas, knowledge, and information for a much better society.

The government should not shut out Nigerians or make it impossible for them to reach out to the rest of the world to market their skills, talents, and products in return for the much needed foreign exchange which is the essence of the digital economy which is the fulcrum of the administration’s |economic policy.

Nigerians deserve efficient and affordable telecom services to conduct their business activities on a global scale, which the controversial 5% excise duty seems to negate. It is a right, not privilege!

Ibrahim Dan Halilu is an Abuja based media consultant and communication expert. He can be reached via email at [email protected] or mobile 08101064449 9SMS only).

 

 

 


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SLTV Breaks Pay TV Monopoly, Offers Affordable Alternatives to Nigerians

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Metrodigital Limited, parent company of Silver Lake Television (SLTV), has affirmed its commitment to fostering competition and providing affordable alternatives for consumers.

SLTV Breaks Pay TV Monopoly, Offers Affordable Alternatives to Nigerians

This is in a bid to the monopoly of the dominant operator in Nigeria’s pay television market.

Dr Ifeanyi Nwafor, managing director of Metrodigital Limited, made the commitment when he was honored with ‘Salute to Courage Award’(SACA) at the SLTV post launch reception organised by Camroll Quest Limited in collaboration with friends and associates of the SLTV boss during the weekend in Abuja.

The award was for his resilience and patriotic stance in ensuring that Nigerians enjoy good but affordable pay TV service.

During the post-SLTV launch reception and awards ceremony, Nwafor emphasised the importance of ending the monopoly to drive down prices and improve service quality.

He highlighted the positive reception from Nigerians, who now have access to alternative platforms offering comparable channels at more affordable rates.

“I’m expecting that other companies would also come in and when there’s serious competition, you better work on services provided to your customers. Nigerians are very happy that the monopoly has been broken, you can get to other platforms and get some channels you get in DStv and GOtv at a cheaper rate.

“SLTV is a platform for innovation. We want Nigeria to be a leader in this industry, and not only in Nigeria but across the globe. Just like Nigerian music making waves all over the world, we are very sure that this industry has higher potential. We need many companies to spring up and be able to succeed not only in Nigeria but also in other countries,” he said.

Nwafor expressed SLTV’s ambition to drive innovation and position Nigeria as a global leader in the industry. Drawing parallels with the success of Nigerian music on the international stage.

He underscored the untapped potential of the television industry and called for the emergence of more indigenous companies to thrive not only in Nigeria but also in other countries.

Addressing concerns about subscription price hikes, Nwafor reassured subscribers of Metrodigital Limited’s commitment to affordability, stating that they are mindful of Nigeria’s economic challenges and have no plans for price increases in the foreseeable future.

Nickky Onyeri, chief operating officer of Camrol Guest Limited, commended Metrodigital Limited for its contributions to Nigeria’s economic growth and credited the supportive environment provided by the government, particularly acknowledging the efforts of Bola Tinubu in renewing hope for the nation.

“This is coming within one year of his government, if he is not providing that environment, I’m sure this could not have been possible.

Onyeri said, “We must commend Tinubu for all the support to all Nigerians who are committed to renewing the hope of Nigeria.”

Abubakar Jijiwa, chairman of the occasion, urged SLTV to prioritise quality control and remain competitive in the global market. He emphasised the importance of continuous innovation to stay ahead of competitors and maintain consumer satisfaction.


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NAN, SLTV to Partner on Local TV Content Promotion

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Malam Ali Muhammad Ali, managing director of the News Agency of Nigeria (NAN) has assured that the agency will work to promote SLTV, indigenous satellite television, in the country.

NAN, SLTV to Partner on Local TV Content Promotion

Ali gave the assurance when Dr John Nwafor, managing director, Metro Digital Limited, the operator of SLTV paid him a working visit on Friday in Abuja.

The managing director said that promoting indigenous brands would ensure an inclusive development of the country and encourage consumers to buy-in to local products.

“We identify with your goal, which is why we will always tell stories that promote indigenous initiatives.

“NAN is very reliable and trusted brand, and will always be on the side of the underdog, we will always be on the side of the truth.

“Rest assured that this is home and the agency is open to any kind of partnership,’’ he assured.

He further said that the agency was also working on rebranding its local and international offices across the globe, to tell Nigerians and Africans stories inclusively.

According to him, presently we are working on repositioning the agency to compete more favourably with other global brands and work smart.

“We are already positioning to face the impending challenge of Artificial Intelligence and we are looking at having a good automated news content.’’

Earlier, Nwafor, commended the efforts of the Federal Government for encouraging indigenous satellite television companies as SLTV in the network industry.

He explained the process began from former President Muhammadu Buhari’s administration, with the modification of the National Broadcasting Corporation’s (NBC) Codes and Act to accommodate local players.

“The government tried to open up the industry and encourage local players to be part of the satellite television ecosystem, and the government effected some changes in the NBC code and Act.

“The Copyright Act was also modified to encourage Nigerians to participate in the industry, because we believe that when the industry is opened up, the consumers will win.

“Then, former Minister of Information and Culture, Lai Mohammed invited us to look at the framework and see how we can participate.

“It was in that process we applied for licence for our Direct-to-Home transmission paid television, which is SLTV,’’ he said.

He further said the action was followed with a mandatory court order to ensure that the reviewed NBC code was adhered to and implemented.

Nwafor said that the intervention by the government was to end exclusivity of content by few giant satellite television companies.

The SLTV boss appreciated the management of NAN for telling the story of the emergence of SLTV, adding that indigenous satellite television networks would thrive with the support of Nigerians.

Highlight of the visit was the presentation of three SLTV decoders and dishes to the management of NAN.

 

 

 


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AI and ‘phygital’ experiences re-set to reshape the customer journey in 2024

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By Andrew Egan, Africa Regional Sales Director at Infobip

With brands recognising the power of conversations, AI-driven solutions, and phygital experiences, consumers can anticipate more personalised, seamless, and satisfying engagements with businesses this year. As technological innovations continue to shape the business landscape, 2024 is poised to be a transformative year for customer experience. However, businesses must keep an eye on the emerging trends shaping the landscape as they realign their strategies to prioritise customer satisfaction.

Balancing customer experience trends against business process optimisation

Increasingly, the emphasis on Customer Experience (CX) is prompting organisations to adopt creative ways to use customers to start, and sometimes complete, the processing journey against an item of work. As businesses look to grow customer acquisition or reduce processing costs, it is becoming evident that Generative AI and Interactive AI are critical tools for improving cost-of-service ratios or Life Time Value: Customer Acquisition Costs (LTV: CAC) ratios for improved x-selling and upselling outcomes. In line with this, identifying work types for automation is key to quantifying how much effort organisations can remove from their support centres and what Capex or Opex costs can be optimised. Additionally, businesses must understand their customers’ behaviour and their choice of when, how, and if to engage with a brand.

CX is not merely about providing a channel to customers or a five-star rating at the end of a call. It is about ensuring that customers return to the brand, measuring and appreciating customer behaviour across your digital ecosystem, and knowing when to support them or when to sell to them. In many environments, improving business processes with tools such as Generative AI or Interactive AI results in a downstream impact of improved CX. Hence, organisations should look at the business challenge to be solved before attempting to resolve the issue of CX in isolation.

End-to-end conversational journeys with businesses and brands

As consumers seek an enhanced customer experience, they will increasingly demand two-way conversational interactions with a business or brand through the same channels and chat apps they use with their families or friends. They will also desire a seamless experience rather than switching between devices and channels.

Until now, brands have been reimagining this journey through a conversational lens, where much of the user journey is directed through a single chat app or digital channel like WhatsApp. The focus now shifts from merely adopting these channels to perfecting the end-to-end conversational experience.

Thus, we can expect to see the emergence of truly end-to-end platforms, where customers can click through an advert on Instagram, educate themselves about a product, click to purchase, pay, receive delivery notifications, and complete a satisfaction survey within a single conversational thread on WhatsApp.

META, with WhatsApp, is leading this revolution, with new features such as Flows and Payments facilitating users to transition smoothly from viewing an Instagram ad to making a purchase, all within the platform. Leading brands like Google and Apple are also making waves in this space, and more platforms are likely to follow.

The move from generative AI to interactive AI

Generative AI, or Gen-AI, has made remarkable progress, especially in customer support. This technology has been instrumental in auto-generating content for messages and emails and AI-driven bots that can handle basic queries.

However, the future lies in interactive AI, where, according to British AI researcher and entrepreneur Mustafa Suleyman, “bots that can carry out tasks you set for them by calling on other software and other people to get stuff done.” In line with this, analysts predict the emergence of a federation of different bots and AI algorithms being used to trigger different actions across the customer journey.

These advanced tools will be central to marketing and sales automation, answering product-related questions, scheduling deliveries, and managing payments. Integrations will span from generating campaign content to providing AI-driven chatbot interactions, ensuring fluid, human-like conversations with the customers, all within a customer’s favourite channel.

The rise of the super app

The ‘super app’ concept has gained significant attention in recent years, with platforms such as WhatsApp, WeChat, and various others. These platforms, boasting billions of subscribers, present a golden opportunity for brands to integrate and offer their products and services. Tech billionaire Elon Musk described WeChat as “Twitter, plus PayPal, plus a whole bunch of other things, and all rolled into one with actually a great interface.”

Telegram appears to be moving towards this model, announcing in September last year that “developers can (now) use JavaScript to create infinitely flexible interfaces that can be launched right inside Telegram — and can completely replace any website.”

Envisioned as multi-purpose hubs, these apps will evolve into platforms where users can seamlessly interact with multiple brands.

The rebirth of virtual reality and augmented reality

However, things are also heating up in the virtual reality (VR) and augmented reality (AR) space. META recently launched its new generation of Ray-Ban META smart glasses. Among other updated features, these will integrate META’s AI-powered, advanced conversational assistant. By saying “Hey META,” users can engage with META AI to spark creativity, get information, and control features. Apple has also unveiled its much-anticipated Vision Pro headset, a mixed-reality device capable of both VR and AR experiences.

These products signify a step change in the world of AR and VR, which has, until now, been seen by many as somewhat gimmicky. It is expected that VR and AR will transition from merely PR stunts to real-world use cases. Using these tools, businesses and brands can create exceptional, awe-inspiring experiences on a scale that has never been possible in the physical realm.

Phygital experiences

Against this backdrop, it is anticipated that further convergence of the physical and digital realms will occur, with businesses and brands crafting captivating ‘phygital’ experiences tailored to customer preferences in real-time. Retailers will further weave technology into their brick-and-mortar stores, leveraging data to personalise what customers hear, smell, and see. Simultaneously, e-commerce platforms will explore the potential of virtual and augmented reality, pioneering a new age of digital retail.

Numerous examples already demonstrate this concept in action, like retail brand Marks & Spencer’s AR shopping app, which allows customers to walk around a store with the app using an AR filter to direct them to the location of specific items. As this technology develops, it will help customers experience products as if they were already in their possession, allowing them to make informed decisions about what they buy.

More to come

This year promises to be an exciting year for customer experience. With brands recognising the power of conversational interfaces, AI-driven solutions, and phygital experiences, consumers can anticipate more tailored, seamless, and delightful interactions.


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