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Telcos Write Senate, Propose 1% Communication Tax

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  • Telcos Write Senate, Propose 1% Communication Tax

The Association of Telecommunications Companies of Nigeria, the umbrella body of telecoms companies in the country, has written to the President of the Senate, Bukola Saraki, proposing one per cent communication tax.

In the letter made available to our correspondent, and signed by the ATCON President, Mr. Olusola Teniola, the association said it would continue to kick against the proposed nine per cent Communication Service Tax Bill, until its review to one per cent.

Teniola said there were reasons to suggest that the desire to widen the tax net was laudable and that as things stood, telecommunications industry was about one of the few areas where the net-capture could be widened.

“We, therefore, suggest that an increase in VAT tax, which is already included in all services of telecommunications by an increase that is not beyond one per cent should be a good reform strategy,” the APCON president stated.

According to him, the input of recent studies by credible organisations is APCON’s guide.

“The projections are that a new tax on the ICT services as high as nine per cent that is being proposed will result in excluding 10 per cent of the population, that is talking of about 20 million Nigerians from access; whereas, the survival of our economy is on attracting more citizens to have access to Internet and therefore ICT services. It does not add up if whatever we do ends up not bringing more people into access.

“The reality of Internet access in Nigeria is that it is all about mobile. Only about 13 per cent of Nigerians get broadband access via mobile while less than one per cent of the people do from fixed services,” he said.

The ATCON boss stated that one of the main reasons the rate of Internet adoption and use was rather slow in Nigeria was the high cost of data subscription.

He said, “A 500MB plan costs typically 5.4 per cent of average monthly income. The current definition of affordability used by the United Nations Broadband Commission is where the price of a broadband plan is less than five per cent of average monthly income. If we are to use this definition, Nigeria is on the cusp of affordability.”

He added, “In Nigeria, the average income in 2014 was $2970 (GNI per capita, source: World Bank), 40 per cent of the population actually earned less than half that amount. In practice, this means that a 500MB mobile Internet plan priced at 5.4 per cent of average monthly income actually costs the majority of Nigerians anywhere between seven per cent and 18 per cent of monthly income.”

Teniola, however, said that ATCON would be happy to support the government to make the best of the tax efforts, saying they were certainly key components of strengthening the economy and sustaining the industry.

“Our mandate is to support the Federal Government to succeed in attracting and protecting investments in the telecommunications industry and to make meaningful input to all aspects of economic development, including legislation and management of our industry, so it continues to be the oil of growth and development.”

The group added, “No doubt, there is severe pressure at this time and government revenue cannot be different. We, however, pray that the template with which the telecoms industry is viewed and assessed be slightly modified.

“The truth is that there is severe over taxation in our industry. It explains the slow penetration of services into ‘unserved’ areas of the country. The truth again is that contrary to popular belief, telecommunication operators and service providers are barely sustaining existence in these times.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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TikTok Vows Legal Battle Amid Threat of US Ban

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As the specter of a US ban looms large over TikTok, the popular social media platform has declared its intention to wage a legal battle against potential legislation that could force its Chinese-owned parent company, ByteDance Ltd., to divest its ownership stake in the app.

In what amounts to a fight for its very existence in one of its most crucial markets, TikTok is gearing up for a high-stakes showdown in the courts.

The alarm bells were sounded within TikTok’s ranks as Michael Beckerman, the company’s head of public policy for the Americas, issued a rallying cry to its US staff.

In a memo obtained by Bloomberg News, Beckerman characterized the proposed legislation as an “unprecedented deal” brokered between Republican Speaker and President Biden, signaling TikTok’s readiness to challenge it legally once signed into law.

“This is an unprecedented deal worked out between the Republican Speaker and President Biden,” Beckerman stated in the memo. “At the stage that the bill is signed, we will move to the courts for a legal challenge.”

The urgency of TikTok’s response stems from recent developments in the US Congress, where lawmakers have fast-tracked legislation mandating ByteDance’s divestment from TikTok.

The bill, intricately linked to a vital aid package for Ukraine and Israel, has garnered significant bipartisan support and is expected to swiftly pass through the Senate before landing on President Biden’s desk.

Beckerman minced no words in his critique of the proposed legislation, labeling it a “clear violation” of TikTok users’ First Amendment rights and warning of “devastating consequences” for the millions of small businesses that rely on the platform for their livelihoods.

TikTok’s defiant stance reflects the gravity of the situation facing the tech giant, which has spent years grappling with concerns from US officials regarding potential national security risks associated with its Chinese ownership.

Despite extensive lobbying efforts led by TikTok CEO Shou Chew to allay these fears, the company now finds itself at a critical juncture, where legal action appears to be its last line of defense.

ByteDance, TikTok’s Beijing-based parent company, has also signaled its intent to challenge any US ban in court, signaling a united front in the face of mounting pressure.

However, navigating the legal landscape will not be without its challenges, as ByteDance must contend with both US legislative measures and potential obstacles posed by the Chinese government, which has reiterated its opposition to a forced sale of TikTok.

As TikTok prepares to embark on what promises to be a protracted legal battle, the outcome remains uncertain.

For the millions of users and businesses that call TikTok home, the stakes have never been higher, as the platform fights to preserve its presence in the fiercely competitive landscape of social media.

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Starlink Pulls Plug on Ghana, South Africa, and Others

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Starlink, the satellite internet service operated by SpaceX, has announced the cessation of services in countries including Ghana and South Africa.

This decision comes as a significant blow to users who have come to rely on Starlink for their internet connectivity needs.

The decision, set to take effect by the end of April 2024, will disconnect all individuals and businesses in unauthorized locations across Africa, including Ghana, South Africa, Botswana, and Zimbabwe.

While subscribers in authorized countries such as Nigeria, Mozambique, Mauritius, and others can continue to use their kits without interruption, those in affected regions face imminent loss of access.

One of the reasons cited by Starlink for the discontinuation is the violation of its terms and conditions.

The company explained that its regional and global roaming plans were intended for temporary use by travelers and those in transit, not for permanent use in unauthorized areas. Users found in breach of these conditions face the termination of their service.

Furthermore, Starlink’s recent email to subscribers outlined stringent measures to enforce compliance.

Subscribers who use the roaming plan for more than two months outside authorized locations must either return home or update their account country to the current one. Failure to do so will result in limited service access.

The decision to discontinue services in certain countries raises questions about the future of internet connectivity in these regions.

Also, concerns have been raised about Starlink’s ability to enforce the new rules effectively. Reports indicate that the company has previously failed to enforce similar conditions for over a year, raising doubts about the efficacy of the current measures.

Starlink’s decision to pull the plug on Ghana, South Africa, and other nations underscores the complexities of providing satellite internet services in diverse regulatory environments.

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Nigeria’s Broadband Penetration Stalls at 42.53% Amid Connectivity Challenges

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Nigeria’s broadband penetration has stalled at 42.53% as of January, according to the latest report.

Subscriptions currently stand at 92.19 million, indicating a significant gap in connectivity, particularly in rural areas.

The Nigerian National Broadband Plan 2020-2025 aims to increase broadband penetration to 70% by 2025, with the ultimate goal of achieving 96% mobile broadband coverage by 2030.

However, this ambitious target requires substantial investment—approximately $461 million, according to a recent report by the Global System for Mobile Communications Association (GSMA).

While the country’s major telecommunications companies, such as MTN Nigeria and Airtel Africa, have invested heavily in expanding their network infrastructure, much of this development has been concentrated in urban areas. Rural and underserved regions face a significant coverage gap, exacerbating the digital divide.

Despite these challenges, Nigeria has made progress in improving its broadband infrastructure. Since 2012, the mobile broadband coverage gap across Africa has decreased from 56% to 13% in 2022, due to significant investments in network capacity and new technologies.

Nonetheless, millions of Nigerians, particularly those in rural regions, remain without access to essential telecom services.

To address this issue, Nigeria’s government established the Universal Service Provision Fund (USPF) in 2006, aimed at bridging the connectivity gap and expanding broadband access to unserved and underserved areas.

The fund provides resources for deploying telecommunications infrastructure in economically unviable regions.

The success of these initiatives, along with increased investments in broadband infrastructure and policies to incentivize internet expansion in remote areas, will be crucial in closing the connectivity gap and improving digital access for all Nigerians.

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