A fairer and more consistent telecoms regulation regime would have made the region more attractive to potential investment, says the GSM Association.
Best practice regulation in sub-Saharan Africa, along with fairer taxes and lower duties, would have generated a 25% increase in investment, or $5 billion, says Gabriel Solomon, the GSM Association`s director of government and regulatory affairs.
This would have resulted in a 30% increase in mobile penetration (from 83 million to 108 million) and additional regional annual GDP of $1 billion, he says.
Solomon, who is in SA to attend the Global Mobile Suppliers Association Evolution Forum, says the sub-Saharan region overall has a small mobile penetration of 6%, despite SA`s impressive penetration rate of over 50%.
Sub-Saharan African regulators have the opportunity to use telecoms regulations to unleash mobile growth in the region, he says. By eliminating fiscal and regulatory bottlenecks, the industry`s cost structure will fall and penetration and usage will increase as services become more affordable.
High taxes
Solomon says there is a strong correlation between consumer tax, affordability and demand. Taxes in developing countries are disproportionately high, with an average of 18% accounting for the total cost of ownership, he says. These taxes include import duty, handset taxes and personal tax, he says.
He says high consumer tax is to blame for the boom in the mobile black market. Consumers turn to the black market when traditional outlets are too expensive for them, he says, adding that, as a result, 39% of all handsets sold in Africa were from the black market.
Solomon notes that while cutting taxes on mobile handsets and services attracts new users, exempting low cost handsets from import duties and sales taxes would result in an incremental 930 million handsets being sold by 2010.
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