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How Will VAT Impact the GCC Mobile Phone Market?

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With VAT of 5% becoming effective across the UAE and Saudi Arabia on January 1st, and the rest of the GCC following suit later in 2018, questions are being asked about what this means for the region’s mobile phone market.

 

International Data Corporation (IDC) monitors this space on a continuous basis through its Quarterly Mobile Phone Tracker, and the global technology research and consulting firm examines the potential implications for the market below.

 

“Given that mobile phones are included in the list of VAT-able items, the entire industry – vendors and distributors alike –are wondering what they can expect from consumers in a post-VAT economy and how they can prepare for it,” said Nabila Popal, a senior research manager at IDC.

 

“Many are looking at global case studies where there was a huge buildup of stock in the channel pre-VAT followed by a major slump in sales post-VAT, and they are understandably wondering whether we might see a repeat in the GCC.”

 

Such concerns come at a time when the region’s mobile phone market is already in a state of flux, with IDC’s latest Quarterly Mobile Phone Tracker showing that overall shipments increased just 0.1% quarter on quarter in Q3 2017 to total 6.4 million units.

 

Smartphone shipments declined -4.9% over the same period, so the scenario could have been even more perilous had this decline not been offset by a 13.0% increase in feature phone shipments across the GCC.

 

“The GCC mobile phone market is already going through many significant challenges outside of VAT, due to various ongoing social, political, and economic developments, and VAT will only compound this dire situation,” continued Popal.

 

“Indeed, many industry experts feel this is the worst possible time that VAT could have been introduced, with demand already faltering due to consumers no longer being enticed by the ‘amazing’ new features advertised by vendors as they try to push they latest devices.

 

“There is already a large amount of stock left over in the channel from previous quarters, so distributors are not looking to increase their shipments in the pre-VAT weeks, with many even looking to vendors to reduce their targets for Q4. As such, we do not expect to see any major increase in stock levels in the lead up to the implementation of VAT beyond the regular seasonal increase in Q4, which we are forecasting to be lower than in previous years.”

 

IDC’s recently published Quarterly Mobile Phone Tracker supports this assumption, predicting a quarter-on-quarter increase in smartphone shipments to the UAE and Saudi Arabia of just 5.0% in Q4 2017, which can be attributed to the traditional seasonal increase rather than to any pre-VAT stock buildup.

 

Looking further ahead, IDC expects the introduction of VAT to have a negative impact on smartphone shipments to the UAE and Saudi Arabia during the first half of 2018, with these two markets set to experience a combined -10.1% decline when compared with the same period of 2017.

 

“There are various reasons for the lack of pre-VAT stockpiling in Q4 2017,” said Isaac Ngatia, a senior research analyst at IDC.

 

“VAT is not a one-product – or even one-sector – issue, so prudent distributors will most likely adopt a cautious approach rather than stockpiling devices ahead of its implementation. VAT will also have a significant negative impact on cashflow, at least in the early stages while confusion reigns over VAT recovery. And as there’s already limited credit in the sector, distributors won’t want to be taking any risks that will further constrain their cashflow at a time of such uncertainty.

 

“As for the anticipated slump in post-VAT shipments in H1 2018, the additional 5% for VAT purposes will obviously have an impact on end-user prices, and as margins are already extremely narrow in the mobile phone space there will be little room to maneuver with regards to these increases. However, the effect is likely to vary across different price bands, with target consumers for lower-priced models being much more sensitive to changes in price.”

 

Whatever happens next, the lessons learned over the coming months in the UAE and Saudi Arabia are sure to heavily influence the rollout of VAT in other GCC markets towards the end of 2018.

 


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Telecom Operators Invest Over $1Bn on 2,850 New Sites in 2025 – NCC

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Telecom operators in Nigeria invested more than $1 billion in 2025 to deploy over 2,850 new sites, boosting nationwide coverage and capacity, according to data from the Nigerian Communications Commission (NCC).

Telecom Operators Invest Over $1bn on 2,850 New Sites in 2025 – NCC

NCC

The investment details emerged in the just-released 2025 Network Performance Reports, announced by Dr. Aminu Maida, executive vice chairman (EVC), NCC.

Speaking at an engagement on the reports, Dr. Maida emphasised the regulator’s focus on transparent, data-driven oversight.

“Through our collaboration with Ookla, we are providing independent insights into real-world network performance and the lived experience of Nigerians across cities, rural communities, highways, and emerging 5G zones,” he said.

The Q4 2025 reports highlight steady gains in network quality, including improved median download speeds in urban and rural areas compared to Q3.

The video Quality of Experience gap between urban and rural zones has also narrowed, bolstered by a stronger 4G backbone.

Dr. Maida noted ongoing challenges, such as 5G service gaps and upload speed disparities. “We are actively engaging with operators to address these issues, including gaps in mobile service coverage,” he added.

Operators have committed to surpassing their 2025 investment levels in 2026, with infrastructure rollout set to intensify.

“We look forward to continued collaboration with industry stakeholders as we translate these insights into better connectivity, improved service quality, and a more inclusive digital future for all Nigerians,” the EVC concluded.


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Airtel Africa Records $586m Rise in Profit on FX Gains, Tariff Hike

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Airtel Africa’s profit after tax grew to $586 million in the nine months ended December 31, 2025, up from $248 million in the corresponding period of 2024.

According to the company’s nine-month financial results released on Friday, the higher profit after tax in the current period was driven by higher operating profit and derivative and foreign exchange gains of $99 million, as compared to $153 million in derivative and foreign exchange losses in the prior period.

It disclosed that the group’s revenues in reported currency increased by 28.3 percent to $4,667 million, with constant currency growth of 24.6 percent. Reported currency revenue growth at a premium to constant currency growth reflects currency appreciation in key markets. In Q3’26, constant currency revenue growth improved to 24.7 percent from 24.2 percent in the previous quarter (Q2’26).

“Constant currency revenue growth was supported by tariff adjustments driving a 50.6 percent growth in Nigeria and a strong performance in Francophone Africa, which saw revenues accelerate to 17.0 percent in the nine months.”

In Nigeria, revenue grew by 50.4 percent in constant currency, largely driven by continued strength in the demand for data services, further supported by the tariff adjustments. The constant currency revenue growth was driven by ARPU growth of 39.6 percent and customer base growth of 7.8 percent.

“In reported currency, revenue grew by 52.1 percent to $1,123 million, with Q3’26 revenue growth accelerating to 70.9 percent compared to constant currency growth of 52.9 percent.

“Significantly higher reported currency growth during the quarter compared to constant currency growth was due to the appreciation in Nigerian naira from a weighted average NGN/USD rate of 1,627 in Q3’25 to NGN/USD 1,456 in the current quarter,” it disclosed.

Insights from Airtel’s financials revealed that voice revenue in Nigeria grew by 35.8 percent in constant currency, driven by voice ARPU growth of 26.0 percent, reflecting the tariff adjustments earlier in the year.

Data revenue also grew by 65.4 percent in constant currency as a function of both data customer and data ARPU growth of 8.0 percent and 49.7 percent, respectively. Data usage per customer increased by 26.2 percent to 10.7 GB per month (from 8.4 GB in the prior period), with smartphone penetration increasing 4.6 percent to reach 54.1 percent. Smartphone data usage per customer reached 13.4 GB per month compared to 11.2 GB per month in the prior period.

Sunil Taldar, chief executive officer, said these results highlight the strength of our strategy, with strong operating and financial trends across the business.

He added that “During the quarter, we accelerated investment to enhance coverage and data capacity while also expanding our fibre network. Coupling this investment with innovative partnerships strengthens our customer proposition and positions us to capture the considerable growth opportunity across our markets.

Digitisation, technology innovation, and embedding AI in our processes will also optimise the customer experience with increased digital offerings and closer integration of GSM and Airtel Money services, allowing us to unlock the strong demand across our markets.

Smartphone adoption continues to increase with a penetration of 48.1 percent, and we are seeing solid progress in the development of our home broadband business, reflecting the need for reliable, high-speed connectivity across our markets.

“Our push to enhance financial inclusion across the continent continues to gain momentum with our Mobile Money customer base expanding to 52 million, surpassing the 50 million milestone.

Annualised total processed value of over $210 billion in Q3’26 underscores the depth of our merchants, agents, and partner ecosystem and remains a key player in driving improved access to financial services across Africa. We remain on track for the listing of Airtel Money in the first half of 2026.

“Disciplined execution on cost efficiency, alongside accelerating revenue growth, has enabled another sequential improvement in our quarterly EBITDA margin to 49.6 percent, underpinning constant currency EBITDA growth of 31 percent, and we remain focused on driving further incremental margin improvements.

“Our strategic priorities remain clear: to continue investing in best-in-class connectivity, accelerate financial inclusion through our mobile money platform, and deliver an exceptional customer experience. These results reinforce our confidence in the long-term potential of our markets and our ability to create value for all our stakeholders,” he added.


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Africa’s AI Guru Abodunrin Charts Path to Continent’s Digital Dominance

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David Adeoye Abodunrin, Africa’s foremost AI transformations coach and internationally recognised futurist, has declared that the continent’s immense potential can only be unlocked when purpose is aligned with strategic intelligence.

Africa's AI Guru Abodunrin Charts Path to Continent's Digital Dominance

David Adeoye Abodunrin

Speaking to ICT editors in Lagos, Abodunrin—renowned for nearly three decades of multidisciplinary expertise spanning artificial intelligence disruption, digital governance, behavioural intelligence, cybersecurity, and human capital transformation—said Africa must embrace AI as a transformational frontier rather than a mere tool.

“AI is not merely a tool, it is a transformational frontier that can unlock prosperity, resilience and leadership for Africans in the global digital era,” Abodunrin stated.

Abodunrin, widely sought after by C-suite executives, policymakers, founders and institutional boards, is recognised internationally as a foresight architect and strategic transformation coach. His mission, he explained, is to help individuals, governments and organisations engineer strategic advantage through anticipatory intelligence and ethically aligned innovation.

His work focuses on decoding emergent AI and intelligence systems that reshape markets, redefine competitive advantage, and enable sovereign digital ecosystems.

He is also a 14-time international bestselling author whose frameworks integrate behavioural psychology, foresight strategy and digital sovereignty to prepare leaders for future complexities. Through his organisations, including Cubed Integrated Consulting and Cyberfore Consulting, Abodunrin equips governments, boards, and enterprises with tools to build secure, future-ready institutions that thrive amid volatility.

He stressed that Africa’s transformation must be rooted in local contexts and values, not imported wholesale from global models.

“In Africa, transformation must not just follow global models, it must reflect our cultures, our challenges and our collective aspirations,” he emphasised. “This continent holds immense potential; we simply need to align purpose with strategic intelligence to unlock it.”

His coaching and advisory services emphasise strategic AI governance tailored for African economies, executive and leadership transformation for sustained institutional resilience, digital and cyber intelligence frameworks to protect sovereign infrastructure, and behavioural intelligence and insights for inclusive growth and innovation.

Despite his international recognition, Abodunrin insists that his philosophy centres on African solutions for African realities—developing local talent, embedding ethical AI adoption, and fostering foresight strategies that account for Africa’s unique socio-economic ecosystems.


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