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ALTON Cautions FG on Introduction of Communications Tax

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Association of Licensed Telecommunications Operators of Nigeria (ALTON) has cautioned federal government over the move to introduce communications tax saying that it will amount to double taxation.

According to a statement signed by Gbolahan Awonuga, executive secretary of the Association ‘the introduction and collection of the Tax without the exclusion of the applicability of the Value Added Tax (“VAT”) which was introduced by the Value Added Tax Act and is also applicable to services rendered by service providers in the telecommunication sector, will amount to double taxation as the proposed tax is an additional tax on communication services rendered to the same end users who already pay a five percent (5%) tax as VAT.’

ALTON further said that the administration of this tax regime as proposed will be cumbersome and impractical. 

“We must correct this general notion that service providers can absolve any tax without considering the capital and operational cost to the service providers.”

The statement noted that high consumer taxes on communication services would impact negatively on economic and broadband development. 

“Today the country has more than 83 million unique subscribers, accounting for 45 per cent of the population. As well as providing access to financial services, Education and Healthcare to millions of citizens, many for the first time, telecoms has also played a critical role in reducing transportation, communication and transaction costs.  Pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of broadband affordability which is a key challenge in connecting the unconnected.

“In addition, the telecom ecosystem contributed US$8.3 billion in value add to the Nigerian economy in 2014 alone, and telecom operators supported the creation of 164,000 telecom growth is a fundamental part of the government’s Vision 2020 plan to consolidate Nigeria’s position as one of the 20 largest economies jobs . Such is its significance, that driving in the world and a central element of President Buhari’s election manifesto.”

It added that, the communication service tax on the contrary, will negatively impacting take-up of consumer services and decline industry revenues.  

“The proposed tax will reduce the incentive for telecom operators to invest in the infrastructure improvements that are essential to improve and expand mobile/broadband connectivity across Nigeria. Telecom industry investment in Nigeria is already constrained by multiple taxation and may not have room to contain the tax.

There are 26 different taxes and fees levied on mobile operators and consumers, including national and local taxes on revenues, businesses and business sites as well as regulatory fees such as spectrum and permits fees.

On the National Broadband Plan, ALTON said that broadband penetration remains low at less than 10%, with the government setting a target of 30% by 2018. 

“There is more ground to cover as only less than 10% of telecom over 160 million subscribers can access broadband.  The Nigeria Broadband market opportunity is huge in terms of distribution and penetration.

“According to statistics from the ITU, despite the fact that Nigeria has 45 million Internet users, the highest online population in Africa, only nine percent or about 14.5 million are actually internet subscribers. Opportunity exists for over 100 million potential internet users. Internet-to-Home Penetration is 4.6 per cent while broadband penetration is at a mere 6per cent. With a youthful population and growing middle class, the market holds great potential.” 

It concluded that the introduction of the CST law without the harmonization of other extant laws is likely to make the current Government unpopular, as it will put pressure on the Nigerian tax system which will make it unattractive to investors and may also be counter-productive for targets on broadband penetration.

“Instead of laying untoward hardship and heavy burden on an already impoverished citizenry, what government should be doing is coming up with policies that stimulate the economy and put measures in place to ensure a more efficient tax system and framework for tax compliance. A good place to start will be to review and cut down the cost of governance at all levels. The sheer magnitude of the effect of this law cannot be imagined.”


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Rewane, Financial Expert Backs Telcos’ Move to Hike Tariff

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Bismarck Rewane, managing director/chief executive officer, Financial Derivatives Company Limited has backed telecommunication companies’ move to increase tariffs.

Rewane, Financial Expert Backs Telcos’ Move to Hike Tariff

Recall that telecom companies recently reiterated calls for an increase in prices of calls, data, and other services.

They argue that current prices are insufficient to maintain their business operations.

This request is contained in a communique signed by the Association of Licensed Telecom Operators of Nigeria (ALTON) and the Association of Telecommunication Companies of Nigeria (ATCON).

The telecom providers are advocating for cost-reflective tariffs, claiming that adverse economic headwinds are threatening their financial viability.

The operators stated that its general service pricing framework has not been reviewed upward in the last 11 years because of regulatory constraints.

“For a fully liberalised and deregulated sector, the current price control mechanism, which is not aligned with economic realities, threatens the industry’s sustainability and can erode investors’ confidence,” the telcos said.

The telcos called on the government to facilitate a constructive dialogue with its industry stakeholders to address pricing challenges and establish a framework that balances consumers’ affordability with their financial viability.

This push for higher prices coincides with MTN Nigeria reporting a loss due to foreign exchange losses in 2023 and Airtel experiencing declining profits amid an economic downturn in the country.

While the development has triggered a backlash in some quarters, Rewane said telco pricing needs to reflect current realities.

He was a guest on weekend’s edition of Channels Television’s Politics Today

 

 

 

 


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Africa Data Centres Unveils ADC Channel Programme

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Africa Data Centres, a division of the Cassava Technologies group, is excited to announce the launch of its exclusive channel partner programme, ADC Channel.

Africa Data Centres Unveils ADC Channel Programme

This programme is designed to establish colocation and ecosystem partnerships, empowering members to expand their product portfolio & offerings alongside their market presence including an expanded data centre footprint.

ADC Channel presents a unique opportunity for global carriers, Internet Service Providers (ISPs), system integrators, Data Centres, Mobile Network, Content Developer, telecommunications companies, network infrastructure operators, hyperscalers and others to deliver state-of-the-art, sustainable and cost-effective digital solutions to their clients.

The primary objective of ADC Channel is to foster collaboration amongst partners, facilitating the delivery of optimised solutions and comprehensive support to clients. Partners enrolled in ADC Channel will benefit from a flexible approach that accommodates various partnership and go-to-market (GTM) models.

Finhai Munzara, CFO of Africa Data Centres, emphasises that the benefits of the ADC Channel programme extend to all types of partners.

“Our facilities are designed with the needs of hyper-scale, wholesale & enterprise clients in mind, catering to their technical, operational and commercial requirements. Whether it’s greenfield projects, built-to-suit facilities, powered shells, dedicated halls, or hybrid colocation, we offer flexible, scalable and sustainable solutions that suit partners of every kind.

He elaborates on the advantages of becoming an Africa Data Centres Partner.

Firstly, clients gain an additional product offering & footprint to augment their existing portfolio, enabling them to offer bundled solutions. This not only enhances their current revenue streams but also positions them for further growth & retention with both existing and future customers.

Africa Data Centres has also developed ADC Marketplace, a pioneering platform designed to empower partners and customers across the continent.

This innovative marketplace provides a dynamic space for partners to showcase their services and for customers to explore offerings, fostering collaboration and visibility within the African tech community. Offering unmatched connectivity and growth opportunities, the ADC Marketplace stands as the ultimate platform for African enterprise organisations and tech companies seeking to thrive in today’s digital landscape.

Partners stand to benefit from reduced churn, as colocation is inherently a ‘sticky’ product with minimal price erosion. By offering best-of-breed colocation services from Africa’s leading data centre provider, partners can differentiate themselves from competitors.

Partners will also enjoy seamless access to data centre experts, continuous commercial and technical support, and regular, complimentary training for their sales and product teams.

Furthermore, partners face no financial risk, as participation in the channel programme requires no investment and entails no capital expenditures for building data centres.

Partners can also leverage flexibility in setting their selling prices and receive significant upfront discounts, further bolstering their competitive advantage. Exclusive benefits include competitive pricing, dedicated sales & Presales Teams, Remote Hands support and access to joint marketing resources & activities, enabling partners to thrive in the marketplace.

Munzara emphasised that ADC Channel programme  epitomises Africa Data Centres’ commitment to fostering collaborative growth and innovation. “It serves as a platform for clients to enrich their product portfolios and seamlessly extend their business across diverse ecosystems with openness and transparency.” Africa Data Centres warmly invites partners to embark on this transformative journey towards shaping the future of digital connectivity in Africa.

“The programme prioritises mutual growth, leveraging Africa Data Centres’ profound industry expertise and extensive infrastructure,” Munzara concluded.

 


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Airtel Hosts Interactive Knowledge Session for Secondary School Girls

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As part of its commitment to empowering and mentoring women to become global leaders while breaking stereotypes and closing gender gaps, the Airtel Women Network, a platform comprising female employees of Airtel Nigeria, welcomed girls from Airtel’s adopted school, Alaba Oro Comprehensive Senior High School, Ajegunle, to commemorate International Day of Girls in ICT on Monday.

Led by the telco’s IT Director, Kemi Ariyo, the session emphasized the need for the rise of influential female role models in driving progress within Science, Technology, Engineering, and Mathematics (STEM) careers. It also served as an avenue to inspire young girls about the vast opportunities within the Information and Communication Technology (ICT) field.

During the session, Ogo Ofomata, Director of Enterprise and Airtel Business and President of the Airtel Women Network, shared insights on the significance of the 2024 commemoration with the students.

“Leadership entails leading yourself to do the things you have to do. With regard to the theme of this year’s International Girls in ICT Day, which is Leadership, our goal is to empower young girls and women to become programmers, coders, designers and to pursue careers in the ICT sector, ultimately becoming leaders in the IT sector,” she said.

The highlight of the event was a thought-provoking session led by Kemi Ariyo, IT Director at Airtel Nigeria, emphasizing the importance of technological knowledge in addressing various global challenges.

In her words, “The world revolves around technology and everything we do today has to do with technology. You can get into that space by adopting hard work, smart work, and an active involvement in internship programs. In addition, just as technology can be used in music and other sectors, learning technology can help you achieve your goals of problem- solving in this digital age.”

Also speaking at the event, Phanindra Nichanametla, Chief Financial Officer, Airtel Nigeria, restated Airtel’s tagline ‘A Reason to Imagine’, reassuring the students of Airtel’s commitment to encouraging positive imagination. “A very important note to take home from this event is that Airtel is here to change your imagination and give you opportunities to imagine more,” he said.

Airtel remains committed to promoting initiatives that promote gender equality and diversity in the workplace. By investing in the education and empowerment of young girls in ICT, Airtel Nigeria continues to pave the way for a more inclusive and prosperous future in the world of technology.


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