Telecom

9% Communication Tax: Soft Land for OTT To ‘Knife’ Telcos

Published

8 years ago

September 13, 2016

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The proposed nine per cent tax on communications services by the Federal Government has variously attracted more ‘nays’ than ‘ayes’ from different quarters. It is expected owing to the fact, if the Bill scales through, 145.4 million active telephone lines (users) as at June 2016, will be affected.

Specifically, the Communications Service Tax” (CST) is proposed to be a nine per cent charge for the use of the communication service (Section 4 of the Bill), where communication service refers to voice, SMS, MMS, data, and pay per view TV; with focus on internet affordability; i.e., data costs, it is obvious that the tax is to be borne by all consumers.

Barrister Adebayo Shittu, minister of Communications has at different fora, labouriously explained to who cares to know that the goal of the proposed CST is to improve revenue generation as stated in Explanatory Memorandum of the Bill; in fact, the target is pegged at somewhat N20billion (monthly). Well, government should consider other alternatives and not try to further harm an industry that is already bleeding.

On one hand, the National Assembly should reconsider the passage of the CST bill. However, if the tax must be introduced the government must consider a lower tax rate that enables it to achieve fiscal, for instance, revenue targets without undermining broadband affordability and access. Besides the fact that subscribers are going to bear the cost, telecommunication operators will definitely become more vulnerable, particularly now that Over-The-Top content (OTT) providers are already pushing their (telcos) revenue downward which will make an already bad situation worse ultimately leading to further job losses. So, the Bill is a sort of robbing Peter to pay Paul.

Many people have predicted that subscribers will bear the full blunt. True as that sounds, I align with the school of thought that OTT platforms will provide a leeway. Yes, instead of paying a set amount to send a message via the regular service providers- MTN, Glo, Etisalat, Airtel or NTel, smartphone users will cleave more to apps like WhatsApp, WeChat, Viber, Facebook, Twitter, IMO, etc., all of which boast large customer bases and offer innovative features like the ability to send pictures and videos, seamlessly. Telcos own the network, but companies like Google, Facebook can pull surprises on them, should they think of yanking off OTT services from their network. In other words, the nine percent communications service tax as proposed spells more doom for the operators.

Ajay Sunder, Frost and Sullivan analyst, said the shift is hitting markets all around the world.

“Definitely in the developed economies we’re already seeing a trend of declining SMS revenues. But even in emerging economies, like Indonesia, some of the operators are already seeing the impact of OTT apps on their voice and SMS revenue. With Thailand, for example, the minutes of usage of the top three voice providers actually declined close to 4 percent when Line was introduced in 2011.”

Recently, during a Fecebook conversation, Rev’ Sunday Folayan, president of NiRA, sarcastically stated and I want to believe with him that “A lot of people will move to OTT services and the providers will lose significant revenue. Many are not making 9% profit right now. They creatively cheat the end users. The proposed 9% Telecommunications tax in Nigeria is the confirmation of the transliterated Yoruba adage that says … The sheep, saw docility, before snatching the meat from the carnivore.

“Communication Companies in Nigeria cannot see the need for the proposed tax given the fact that the nascent industry should be cultured to enhance the country’s GDP right now, instead of milking it at infancy. Do not be blinded by the MTN Infraction”.

Nurudeen Sulieman nodded in agreement saying, “True talk. With all this 5GB data for 50 Naira Promo you hear every day, GSM operators are now operating like banks, they give sales target not just to the marketing staff, even the few technical staff they have left, as most of their infrastructure and switches have been passed over to a third party for operations and maintenance. ‘Kai’ ‘wetin this people they think self’, when NCC just announce that telephone operators have lost almost 50% of their subscribers.

“I understand the minister is so excited that his ministry will be generating 2 Billion Naira monthly from that tax…Apart from the fact that the target is not achievable because end user will drop by a margin unimaginable, whatever money they generate from the 9% tax will end up as social security stipend for a sizable workers that will be laid off by the same Telecom industry that are targeting. It will also be double jeopardy, because the normal tax will also drop due to low turnover by the operators. I beg make them think am well”.

Alliance for Affordable Internet (A4AI)-Nigeria Coalition in a document released recently, raised critical issues concerning compliance and how it will impact the telcos operations.

A4AI‎ said, “Compliance and responsibility for collecting payments placed on mobile operators. Compliance is likely to add a number of operational costs to operators. For example, rather than annually, all service providers are to file tax returns and pay the tax due not later than the last working day of the month immediately after the month to which the payment relates. So while the 9% tax is to be paid by consumers, analysis points to the fact that they will likely become additional burdens placed on operators as their operational costs will further rise.

While the impacts of the CST on the sector as a whole are major, the above analysis shows the direct, possibly unintended, impact on the consumer and specifically those in low-income groups and women, hence balanced fiscal policy must consider affordability of mobile broadband and should not put in place additional barriers that make Internet access unaffordable for millions of Nigerians.

In the words of Ken Nwogbo, Publisher, Nigeria CommunicationsWeek, “Discontinue the Controversial ICT Tax Now” and I’d simply add I CONCUR!

CFA is the founder of www.techsmart.ng and co-producer/presenter of Tech Trends on Channels TV

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Telecom

Telecom Management Company Appeals for Cooperation and Safety Measures Over Abaranje Base Station Fire Incident

Published

5 hours ago

May 1, 2024

Chike Onwuegbuchi

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Carville Integrated Ventures Limited, a telecoms facility management services provider, has expressed deep sadness by the recent fire incident at Abaranje Base Station, one of the several base stations it manages on behalf of Airtel Nigeria.

The incident, which occurred during maintenance operations on a leaking part of a diesel tank, resulted in injuries to some individuals from the local community who forcefully gained unauthorized access into the facility hosting the base station during the maintenance work.

Despite this breach of access control by the impacted individuals, Carville, who has responsibility for the site management expresses its sympathy to the victims and has offered to provide healthcare support to them.

The management of Carville Integrated Ventures, extends her condolences to the affected individuals and their families, stating, “Our hearts go out to those injured in the unfortunate incident. We are committed to providing support and assistance during their recovery process.”

Carville also emphasizes the company’s dedication to corporate social responsibility, stating, “We stand by our commitment to the communities we serve, and we will continue to prioritize their welfare in all our operations.”

Furthermore, Carville appeals to community leaders and members to cooperate with the company in implementing safety measures to prevent similar incidents in the future. “Safety is our top priority, the management affirmed. “We urge everyone to adhere to safety protocols and guidelines to ensure the well-being of all.”

Carville is working closely with local authorities and regulatory bodies to conduct a thorough investigation into the incident and implement necessary measures to prevent recurrence.

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Telecom

Google, Kaduna State Others Partner to Launch First Hausa-Language AI learning Series to Expand Tech Education and Empower Women

Published

5 hours ago

May 1, 2024

Ugo Onwuaso

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A new initiative aimed at empowering women in Northern Nigeria through AI education was launched today. Google, in collaboration with the Kaduna State Government, and Data Science Nigeria, introduced the AI for Beginners Learning Video Series. This series presents Artificial Intelligence concepts in Hausa, making complex technology more accessible and culturally relevant for the region.

In Northern Nigeria, various challenges can impact access to tech education and career opportunities. These include diverse socio-cultural dynamics, infrastructural limitations, and language barriers. The AI for Beginners Learning Video Series, through its engaging animations and culturally relevant imagery, is designed to make complex digital concepts more accessible and relatable, fostering inclusivity and participation in the growing tech sector.

The launch event, held at Umaru Musa Yar’Adua Hall in Kaduna, was a celebration of technology, education, and the immense potential of Northern Nigeria’s women. His Excellency, Governor Uba Sani of Kaduna State, graced the occasion as the Guest of Honor, delivering a keynote address that underscored the government’s commitment to digital transformation and economic growth.

“AI is not just the future; it’s the present,” Governor Uba Sani declared. “By equipping our people, especially our women, with AI skills, we’re not only paving the way for a more prosperous and innovative Northern Nigeria, but also laying the foundation for Kaduna to become a thriving tech hub.”

“We believe that technology can be a powerful force for change and are committed to making learning resources available in local languages to empower more people,” said the Director of Google West Africa during the launch event held at Umaru Musa Yar’Adua Hall, Murtala Muhammad Square, Kaduna. He added, “This series marks a new milestone in our ongoing efforts to enhance AI knowledge across Northern Nigeria, fostering a broader understanding and application of AI technologies that drive innovation and create new job opportunities.”

“By making AI education accessible in Hausa, we’re opportunities for innovation, entrepreneurship, and social impact,” added Dr. Bayo Adekanbi, CEO/Founder of Data Science Nigeria. “These women are the future leaders and innovators of Northern Nigeria, and AI is the tool that can amplify their potential.”

The event also featured speeches from representatives of NITDA and the Ministry of Communications, Innovation and Digital Economy, who underscored the national significance of the initiative and the government’s support for fostering a vibrant tech ecosystem.

The AI for Beginners Learning Video Series is now available on YouTube via the Data Science Nigeria platform, on the NITDA education portal, and for download. To further aid in accessibility, the series has also been deployed on USB drives for distribution and direct peer-to-peer copy at all primary and secondary schools, including public video content copying centres across Kaduna State.

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Telecom

Konga Launches Tech Month with Incredible Discounts

Published

5 hours ago

May 1, 2024

Ugo Onwuaso

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Konga, Leading e-commerce giant has announced its highly anticipated Konga Tech Month starting from Wednesday, May 1, until Friday, May 31, 2024. This good news is not only for tech enthusiasts and bargain hunters but also for home appliance lovers, as this year’s edition goes beyond gadgets to feature home, office and lifestyle essentials.

Konga Tech Month has become a major event in the Nigerian shopping calendar. This annual sales extravaganza is widely regarded as one of the biggest gadget sales in the country. It offers a treasure trove of tech devices at unbeatable prices, attracting a massive audience eager to snag incredible deals on a wide range of products.

This year’s Konga Tech Month boasts an impressive selection of devices across various categories. Whether you need a reliable laptop, phone or a professional upgrade to your office and household with authentic appliances, Konga Tech Month has something to suit every need.

Throughout May, Konga’s customers will stand the chance to take advantage of special discounts on original printers, dependable power solutions and generators from companies like iTEC and iPower Inverters, mobile phones, refrigerators, inverters, and much more at up to half the price. Many freebies and deals will also be on offer for the fastest fingers in the Konga Flash Sale.

“Konga Tech Month is a testament to our commitment to providing Nigerians with access to high-quality yet affordable tech products,” said Mr Nnamdi Ekeh, CEO of Konga. “This year’s event promises to be even bigger and better than last year, so we are thrilled to get started. Thanks to Konga Tech Month, we can accomplish our mission of making cutting-edge technology available to everyone no matter their budget.”

The competitive pricing and special deals offered during Konga Tech Month are available for students, institutions, and organizations. Whether it’s outfitting a computer lab, updating office technology, or providing students with affordable laptops, Konga Tech Month offers a cost-effective solution.

A satisfied shopper from the last edition shared her excitement saying, “The Konga Tech event last year was incredible! I was able to get the high-performance laptop I’d been eyeing for months and at a price I couldn’t believe. The discounts were amazing, and the selection was huge. Plus, being able to choose between online shopping or visiting a Konga store was convenient and made shopping easier. I’m looking forward to Tech Week this year. I’ve been eyeing a new microwave and phone, and I know Konga will have the finest deals in town.”

Konga Tech Month offers a smooth shopping experience for everyone. Customers can browse the extensive selection of discounted tech products online at the Konga website (https://www.konga.com/) or visit any Konga retail outlets nationwide to experience the deals firsthand.

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