Technology

November 23, 2011

Globacom rues high interconnect rate, taxation in telecom industry

By Prince Osuagwu
The opportunity of a visit to the Communications Technology Minister, Mrs Omobola Johnson, last week, gave the Second National Operator, Globacom the medium to express the anomalies it believed have been bringing the progress of the ICT industry down.

The Globacom team led by the Group Chief Operating Officer, Mr Mohammed Jameel, decided to take their case to the minister’s office in Abuja and as the minister obliged audience, the operator did not hesitate to make its point.

On the challenges facing the industry, Jameel and his team said that one of the ways to arrest some of the problems was to immediately put measures in place to save the medium and small players in the GSM category, arguing that unless this is done, their fate may soon follow the trends in the CDMA category who have been sapped dry due to heavy and unbearable interconnect charges paid to the dominant player.

Jameel also drew the minister’s attention to the multiple taxations from Local Youths, Local Government Authorities, State Governments and Federal Government Authorities advocating that Government should publish a common Code of Conduct to govern the demands of the Various tiers of government.

In her reaction, the Minister criticized some arms of government for over levying successful companies, explaining that contrary to existing laws governing all aspects of taxation the level of compliance has been rather low.

According to her, some state governments are under pressure to shore up internally generated revenues which has made them descend so heavily on the industries they perceive as successful, including telecommunications operators. She however informed the team that discussions are on-going to get the various arms and layers of government to comply with the laws governing the telecoms industry.

The Minister assured that Nigeria was trying to build a local ICT industry and cannot allow any operator in any category to die, particularly since their operations help to address very specific needs of the populace.

She revealed that the government was working with a team of consultants to see how the interconnect fees would be reduced to something fair to all players.

She however commended Globacom for the visit, describing the Second National Operator as a company that champions innovations which others follow, particularly when it comes to price reduction.