news

KEY READING FOR THE WEEK The focus of this week’s newsletter is the Kenyan Digital Service Tax (DST). Formally introduced in 2020, it was set at a rate of 1.5% of gross transaction value on digital platforms for both residents and non-residents. In 2021, the DST was amended to exclude residents so that only non-residents firms (i.e., firms without a physical presence in Kenya) were required to pay the DST. The DST is charged on all electronic services, such as mobile applications, eBooks, software, films and music. It excludes communication services (text messages, phone calls, etc.) and it excludes digital […]

KEY READING FOR THE WEEK On October 8th 2021, the OECD announced a tax deal for the digital age. The new tax deal, signed by 136 out of 140 member states, representing over 90% of global GDP, will allocate around US$125 billion in profits to countries around the world. In the second part of our series on ICT taxes, the focus is on unpacking how the OECD deal will work. The first step is to define the problem. The central issue is that, because Netflix doesn’t have a physical presence in Kenya, Netflix is not liable for any corporate income […]

KEY READING FOR THE WEEK On October 8th 2021, the OECD announced a “ground-breaking” tax deal for the digital age. The new tax deal, signed by 136 out of 140 member states, representing over 90% of global GDP will allocate around US$ 125 billion in profits to countries around the world. As part of our new series on ICT taxes, the focus of this blog is going to be on the bigger picture: is the OECD tax deal going to mean more tax revenues for developing countries or are there other, more effective ways to increase tax revenue? Tanzania is […]

KEY READING FOR THE WEEK The main story this week is from South Africa, where the messaging app Moya is generating lots of interest. It has 3.2 million active monthly users. That’s still pretty small compared to WhatsApp, which has around 25 million active users per month in South Africa. But Moya is growing fast and it has a key selling point: text messages are free even if the users data balance is empty. Moya uses reverse billing technology so that customers don’t face a charge. Of course, there are caveats: images and video’s don’t qualify for free data. The […]

KEY READING FOR THE WEEK There are two main stories for this week: the launch of free public wifi in Malawi and the upcoming auction of 3500MHz spectrum in Nigeria. Free public wifi in Malawi The first story is about the launch of free public wifi in Malawi. The government has launched 32 sites across the country. The wifi sites are available in schools, hospitals, libraries and marketplaces. The funding comes from the Digital Malawi project, funded by the World Bank. A total of 481 sites have been identified for funding. For the Digital Malawi project, USD28.3 million of the […]

KEY READING FOR THE WEEK There are two main stories for this week: global tax reform and spectrum allocation in South Africa. Global tax reform The first story is about the deal for international tax reform brokered by the OECD. 136 countries have signed the deal, which has 2 pillars: Pillar (1)  is the re-allocation of taxation rights from home countries (i.e., where a corporation has its headquarters) to markets where they have business activities and earn profits. Pillar (2) is a global minimum tax rate of 15%. Pillar 1 is the most significant for Africa from a digital service […]

KEY READING FOR THE WEEK This week’s main story is a report from the GSMA on Mobile Internet Connectivity in 2021, though we’ll focus on the key trends for sub-Saharan Africa. The main statistic in the report is that half a billion people in sub-Saharan Africa are living within an area covered by mobile broadband but do not use the Internet. The GSMA considers mobile broadband to be either 3G or 4G. 3G coverage in sub-Saharan Africa is 81% in 2020 compared to 51% for 4G. Another factor that the GSMA identified as an obstacle to Internet usage was affordability, […]

KEY READING FOR THE WEEK This week’s main story is a new report from Vodafone on Accelerating 4G access in Sub-Saharan Africa. The main focus of the report is how to increase access to smartphones. Low mobile broadband coverage and low smartphone penetration are the primary reasons why many MNOs in Africa still see increasing voice and SMS traffic. It’s also one of the main reasons why the transition to a data-centric business model is taking longer in Africa compared to the rest of the world. Vodafone estimates that 2G phones are sold in China between US$5-8 and resold in Africa at […]

KEY READING FOR THE WEEK This week’s main story is from Cable.co.uk and its latest ranking of global internet speeds. Sub-Saharan Africa and North Africa are ranked the lowest in the world with average speeds of 6.6 Mbps and 5.68 Mbps respectively. The leading countries in Sub-Saharan Africa are Reunion (43.6 Mbps) and South Africa (19.9 Mbps). The slowest download speed is in Ethiopia at 1.2 Mbps. Equatorial Guinea and Guinea-Bissau have just slightly faster download speeds. There are multiple causes for this poor performance for Sub-Saharan Africa, but key issues are: High taxes and state interference: The state is taking a more prominent role in a […]

KEY READING FOR THE WEEK This week’s main story is from Uganda, where Africell is exiting the market. Africell had about 10% of the Ugandan market but said that it couldn’t see a long term path towards sustainability in Uganda. Local reports stated that part of the explanation for Africell’s departure was its high level of indebtedness after it acquired Orange in 2014. Even though Uganda has 5 other operators, the market is dominated by Airtel and MTN, who are really the only other national operators. Smart Telecom also announced its closure as of the 31st of August this year. […]