KEY READING FOR THE WEEK This week’s main story is from Tanzania, where the government has announced that it will remove VAT on smartphones, tablets, and modems. The rationale for setting aside VAT is to increase broadband penetration from its current level of 38% to over 80% by 2025. This decision is a welcome development in a continent where most governments’ see the ICT sector as a cash cow and have imposed extremely high taxes. Often taxes are specific to the ICT sector and considerably higher than for other sectors. In Sudan, for example, the VAT rate for the ICT sector […]

KEY READING FOR THE WEEK This week’s main story is an overview of the growth of the submarine cable market. Back in 2012, content providers (such as Amazon, Google, Facebook) accounted for 10% of total capacity. By 2020, that number had grown to 66% of total capacity. As a consequence, content providers are driving submarine cable investments. For example, both Google and Facebook have invested in new submarine cables connecting South East Asia to North America. The growth in data usage for content providers also shows how data is driving access. Content providers drive data usage, which in turn, drives data […]

KEY READING FOR THE WEEK This week’s main story is a brief summary of the status of the global corporate tax negotiations amongst G7 countries that are currently ongoing and expected to conclude on Saturday, June 5. One of the sticking points in the negotiation is the removal of country-specific digital taxes. Britain, Italy, Spain, Turkey, India and Austria have introduced digital taxes that the US sees as discriminatory against US companies. The USA has said it would impose 25% tariffs on a range of goods from these countries if the digital taxes are not removed as part of the current […]

KEY READING FOR THE WEEK This week’s main story is a brief summary of the status of Value Added Tax (VAT) across Africa. Kenya: Non-resident digital businesses are required to pay 16% VAT. For example, Netflix in Kenya increased its prices to account for the payment of VAT. Kenya also has a digital services tax of 1.5% for non-resident businesses, but it’s not clear how that would be collected if the business does not have a physical presence in Kenya. Zimbabwe: e-Commerce services provided outside of Zimbabwe are subject to both VAT and an income tax of 5% on turnover […]

KEY READING FOR THE WEEK This week’s main story focuses on Airtel Africa’s financial results for the year ended 31 March 2021. Airtel Africa reported growth in both the voice and data segments of 15% and 24% respectively, in constant currency. Data growth was driven by increasing smartphone penetration and higher 4G rollout, with 76% of Airtel’s network now upgraded to 4G. This meant that data usage grew from 1.9GB per customer to 2.7GB per customer per month. EBITDA margin improved from 40% to 46%. Contrast Airtel’s results with TNM Malawi’s revenue decline of 6% and the benefits of an […]

KEY READING FOR THE WEEK This week’s main story is from Togo, where the government is setting a cap on the number of active SIM cards that any individual can own. The rationale behind the SIM card limit is to stop criminals using cellular phones in their activities. However, the likelihood of a limit on SIM card ownership stopping criminal activity has to be pretty close to zero, while the impact on the poor who use multiple SIM cards to shop for the best deal will effectively mean higher prices. Togo prices are already far too high and Togo ranks […]

KEY READING FOR THE WEEK This week’s main story is from South Africa, where Telkom is being accused of predatory pricing. Telkom was required, as part of a deal with the Competition Commission, to split its wholesale and retail arms. The wholesale arm is called Openserve and is meant to sell services at a wholesale rate to other ISPs. However, ISPs claim that Openserve’s symmetrical 25Mbps/25Mbps fibre package has a higher wholesale price than the retail price offered by Telkom. The wholesale price is R472.50 compared to a retail price of R449 (both prices incl. VAT). Telkom has refused to […]

KEY READING FOR THE WEEK This week’s main story is from Kenya, where the effects of the National ICT Policy are slowly being assessed. Rumours surfaced this week that Airtel Kenya was looking at options, including leaving Kenya, because of the requirement in the National ICT Policy that only companies with 30% “substantive” Kenyan ownership can be licensed to provide ICT services. Airtel Kenya has denied that it is considering leaving Kenya, but it will need to restructure its Kenyan business within the next 3 years in order to comply with the local ownership requirement. This is an increasing trend […]

KEY READING FOR THE WEEK This week’s main story is from Ghana. Negotiations have been concluded and 100% of AirtelTigo will be sold to the Ghanian government. The government of Ghana acquired all customers, assets and agreed liabilities for USD1. The Government would also operate AirtelTigo, once the deal goes through. This also means that Millicom has exited the African market, after having sold its Ghana and Tanzanian subsidiaries. The Ghanian market is dominated by MTN (Scancom) with over 19 million data subscribers compared to 3.9 million for AirtelTigo and 3.05 million for Vodafone Ghana. The history of government controlled […]

KEY READING FOR THE WEEK This week’s main story is a brief follow-up on Uganda from last week. In last week’s digest, the main story was that the OTT tax of 200 shilling per day is going to be replaced by a new data tax of 12% in the form of an excise duty. However, it is unclear how the proposed new tax would be implemented. Uganda already has a 12% excise duty on airtime that was introduced in the Excise Duty Amendment Act of 2018.  In that Act, internet data was excluded but practically speaking, it is possible to pay […]