Weekly News

KEY READING FOR THE WEEK This week’s main story is a follow-up from last week on the tax increases in Kenya and Uganda. Tax increases in both countries were effective from the 1st of July. But the difference is that, in Uganda, the major operators (Airtel and MTN) have absorbed the 12% price increase. Smaller operators, like Smile, initially passed the price increase on, but had to change course and absorb the price increase. In Kenya, in contrast, the price increase has been passed immediately onto consumers. Why the different treatment? Part of the explanation is that an airtime tax of […]

KEY READING FOR THE WEEK This week’s main story is about the tax increases on internet data in Kenya and Uganda. In Kenya, the excise duty on data (as well as calls) was increased from 15% to 20%, effective 1 July 2021. In Uganda, the social media tax of 200 shillings per day has been replaced by a 12% excise duty on internet data, also effective on 1 July. Medical and educational services are excluded from the duty, though it’s not clear how the exclusion of medical and educational services would actually work. The increase in excise duties highlights the […]

KEY READING FOR THE WEEK This week’s main story is about the status of 5G in Africa. While plenty of countries are investigating 5G, only two countries offer fully commercial 5G services on the continent – Kenya and South Africa. In Kenya, 5G is offered based on a 1-year trial license. In South Africa, 5G is offered based on the emergency allocation of spectrum due to the demands of the COVID-19 pandemic. That allocation is meant to expire later on this year. The next country that is closest to launching 5G services is Mauritius. Mauritius decided to forego an auction […]

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 […]