Nokia pushes for tax cut on handsets

Mobile handset manufacturer Nokia is lobbying East Africa member states to zero rate taxes on handsets as a means of boosting its sales and increasing penetration.

Nokia East and Southern Africa General Manager Kenneth Oyolla, said the company is in talks with Uganda, Tanzania and Rwanda to zero rate their taxes on handsets following a successful push in Kenya that has boosted.

“We have witnessed the number of mobile handsets sold in the Kenya market shoot up 20 per cent and this can be attributed to the tax cut on handsets,” said Mr Oyolla.

Nokia will also be focusing on empowering local software developers to come up with applications that can be uploaded and used within the region.

The firm intends to start training software lecturers in local universities on how people can profit from internet applications.

The 2009 Census results released last week indicates that 63.2 per cent households in the country at least own a mobile phone.

Another report by Swedish International Development and Cooperation Agency (Sida) indicates that the most significant barrier to phone ownership is the high cost usage fees.

East Africa region which has more than 140 million people is among emerging markets that investors especially in telecoms are targeting.

The mobile communications markets of Kenya, Tanzania, Uganda and Rwanda, earned revenues of $2.62 billion in 2008 combined and are expected to deliver $8.99 billion in 2015, following the availability of cheaper handsets and network investments in this region, says a recent study compiled by Frost & Sullivan.

“The key drivers in these markets include strong gross domestic product (GDP) growth rates, increasing demand for mobile money transfer services and declining handset costs”, said Frost & Sullivan Research Analyst Jiaqi Sun.

Currently, there are 37.6 million mobile subscribers in east Africa, at a penetration of 30.8 per cent.

The total number of subscribers is expected to reach 99.5 million in 2015, at a compound annual growth rate (CAGR) of 14.9 per cent reports the study.

Other than the fall of handset costs, competition here in Kenya has seen the telecoms cut their tariffs in a bid to attract new subscribers and retain old ones.

Interconnection

Following the drop on interconnection among operators to Sh2.21 from the previous Sh4.42, Zain Kenya led the pack by slashing its tariffs 50 per cent to bring its charges to Sh3 across networks, Essar’s Yu followed suit with the a similar offers while Orange introduced Sh2 for intra-network calls but went a step further to sweeten it with free calls from 10am to 5pm on any calls made on its landline, CDMA network and Orange line with the catch being a Sh100 monthly registration fee.