Telcos say scrap cellphone tax

African telcos are calling for the Ugandan government to scrap the 18% value added tax (VAT) on mobile phones, says All Africa.com.

Uganda has an 18% VAT levy on mobile phones and a 0.3% clearance fee, bringing the total levy to 18.3%. However, Kenya removed the VAT on all mobile handsets, cellular networks, telephones or other wireless networks in its national budget.

Dorothy Ooko, Nokia communications manager for east Africa, notes: "Mobile computing will help the youth be empowered with low-cost durable Internet-enabled mobile phones that gives them access to resources and opportunities in education and enterprise.”

Vivendi SA has interrupted talks with Zain about the possibility of acquiring a majority stake in the Kuwait company's African telecommunications assets, states Bloomberg.

Zain, Kuwait's biggest phone company, says that UBS is advising it on the possible sale of the African unit. Zain values the assets at about $10 billion, three people familiar with the plans said last month.

Telecommunications companies are seeking a foothold in Africa to tap growth in the region as demand slows in mature markets such as Western Europe and North America.

State-owned telecom service provider BSNL plans to pick up a 10% to 15% stake in Essar Group's Kenyan subsidiary as it looks to gain a foothold in Africa, reports The Economic Times.

The Essar Group holds 80% in Essar Telecom Kenya, while the remaining 20% is held by local shareholders.

An equity stake in the Kenyan venture will be of a strategic nature for BSNL and the Essar Group as both companies are eyeing a larger slice of the African telecom market.