Weekly digest for 9 April 2021

KEY READING FOR THE WEEK

This week’s main story is from Uganda, where the Government is proposing to scrap the OTT Tax and replace it with a 12% tax on all data. The proposed new data tax was presented by the Minister of Finance as part of the Excise Duty Amendment Bill of 2021. The rationale for removing the OTT tax was that the revenue generated was far below expectations. In the 2018/19 financial year, the OTT tax was expected to collect 284 billion shillings but only collected 49.5 billion. This result was entirely predictable (see here). Another reason for changing the tax is because VPN use meant that many Ugandans were able to bypass paying the tax. If the tax is put on all data, VPNs will no longer work in terms of bypassing the tax. There is no official date yet on when the new tax would be imposed.

OTHER WEEKLY NEWS FROM AROUND AFRICA

• Botswana: Botswana’s Minister of Transport and Communications announced that Mobile Number Portability has been scrapped, after more than 6 years of preparation. The Minister encouraged operators to promote OTTs instead.
• South Africa: The three largest operators in South Africa have dropped their data prices. The price drop was ordered by the Competition Commission after a finding that South Africa’s data prices were much higher than many countries in the rest of Africa.
• Nigeria: MTN Nigeria resumed airtime sales on banking channels. MTN unilaterally reduced the commission on airtime sales that it paid to banks from 4.5% to 2.5%. In response, all major banks refused to sell MTN airtime. The Central Bank of Nigeria intervened and the commission of 4.5% was reinstated, pending a more permanent solution.
• Nigeria: The Nigerian government has extended the deadline for SIM registration to May 6, 2021. This is the third extension since December 2020.
• Kenya: Airtel has upgraded 600 mobile sites with 5G technology. Sites will be turned on over the next 2 years as devices become more available.
• Tanzania: The TCRA has temporarily suspended the price floor imposed on the 2nd of April. The price ceiling is still in effect, with MNOs required to limit their out-of-bundle rates as well as limit the number of bundles to 50 or less. The price floor goes into effect on the 1st of June and operators are required to “submit a gradual increase” of tariffs. This seems designed to hide price increases from consumers by spacing them over a longer period of time.
• Ethiopia: The ECA has extended the deadline for the two new mobile operator licenses to the 26th of April, citing the impact of the COVID-19 pandemic.