Will telco customers pay for Ghana and Uganda’s revenue shortfalls?

Will telco customers pay for Ghana and Uganda’s revenue shortfalls?

Telecoms services are being affected – directly or indirectly – by authorities in Ghana and Uganda looking for ways to raise revenue.

MTN Ghana, the country’s largest mobile operator by subscribers, has, since the start of this month, been charging more for calls and data services, a move that followed the government’s introduction of a one per cent ‘Covid-19 health recovery levy’.

The levy – of one percent on VAT – was among a series of measures introduced in the 2021 budget to boost health spending and help the economy recovery from the ongoing pandemic.

According to Deloitte, the lockdown measures enforced in the peak of the pandemic and the Covid-induced slowdown in economic activities forced the Ghanaian government to revise initial projected GDP growth for 2020 from 6.8 percent to 0.9 percent.

The change has affected MTN’s voice calls, data, and SMS and is being made, according to MTN, across all services and platforms – from bundle purchases to fibre and from roaming to mobile money. Other operators are expected to follow suit.

Meanwhile, according to Capacity magazine and Ugandan press reports, internet users in Uganda will face a 12 percent tax on their data packages from 1 July.

The government has imposed the tax — now approved by parliament — because the country reportedly had debts of $18.4 billion at the end of 2020 – 30 percent up on 2019.

This charge is part of a series of measures – including fuel tax – being taken to help pay off the public debt. However, following the unpopularity, or avoidance, of the abandoned 2018 tax on over-the-top applications, including WhatsApp and Twitter, it’s hard to say how successful this move will be – or indeed whether it could be counter-productive given the often positive effect of online activity on economic growth.