Telecom body GSMA wants Sub-Saharan Africa to review Surtax

Telecom industry body GSMA has urged governments in Sub-Saharan Africa (SSA) to review Surtax on International Incoming Traffic (SIIT) on the mobile industry.

Sub-Saharan Africa has 328 million mobile subscribers and achieve an annual growth rate of 18 percent over the last five years.

Mobile subscriber penetration is 37 percent.

Impact of SIIT in Africa

SIIT fixes prices for international traffic termination and in these countries where it is imposed, the SIIT has caused the price of terminating international incoming calls to increase by an average 97 percent, with an increase of up to 247 percent in Burundi.

SIIT has already shown its potential to create economic losses to governments that impose it. In the absence of the SIIT, mobile operators could have terminated an extra 1.2 billion international minutes and generating $86 million in revenues from June 2010 to March 2014, indicating that governments could have gained an extra $27.5 million across the period had the SIIT not been introduced.

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SIIT creates significant extra costs to African businesses that trade with, and therefore call, businesses in countries where the SIIT has been imposed, negatively affecting regional integration. Nearly 40 percent of all international incoming traffic is from countries in the region, and in Tanzania, over 50 percent of calls originate within Africa.

GSMA against USOF

A GSMA report also said that consideration must be given to disbanding inactive funds and returning the remaining monies to the operators who paid the levies. The study says alternative approaches to achieving universal service, such as license obligations, are often more effective than USFs.

Tom Phillips, chief regulatory officer, GSMA, said: “A short-term focus by some countries on generating revenue through increasing the SIIT, combined with the continued imposition of USF levies despite accumulated funds that are not being effectively employed, will clearly have a negative impact on the domestic mobile sector and other businesses in the region.”

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