GSMA urges govt to eliminate mobile SIM card tax
Friday, 24 July 2009
FE Report
The GSMA, which represents the interests of the worldwide mobile communications industry, has urged the Bangladesh government to eliminate the SIM card tax.
"The growth of the mobile industry in Bangladesh has come to a halt due to increases in taxes across the board on mobile services. The SIM card tax of Tk. 800 (US$11.6) per connection of each new subscriber is the single largest obstacle to the acquisition of new subscribers, constituting a major barrier to growth and blocking new investments in updated mobile networks that provide broadband via mobile infrastructure," it said in a statement Wednesday.
Ricardo Tavares, Senior Vice President, Public Policy, GSMA commented that the SIM card tax was counterproductive as it represented a wall that low income consumers had to climb before having a mobile phone connection. The SIM card tax increased the total cost of ownership of a mobile phone and actually reduced total tax collection by the government from the industry. It was a negative proposition all round, as consumers lacked access to mobile services, the government would lose with lower tax collection as the number of users declined, and mobile operators had a diminishing customer base. The elimination of the SIM card tax was essential to re-establish the growth path of the mobile industry in Bangladesh and would work in a counter-cyclical way stimulating the whole economy."
"Increased mobile penetration in Bangladesh in recent years has given access to not only voice communication but data access to the internet to rural areas, which were beyond reach otherwise. Today, mobile connections in the country are 46.7 million - 32 per cent penetration but despite this significant growth, Bangladesh remains below its neighbouring countries in terms of mobile and internet penetration. Moreover, mobile adoption growth rates have been consistently falling in the last three quarters and now stand below 3 per cent per quarter, which can be directly attributable to this damaging taxation.
"The GSMA believes that Bangladesh's telecommunications taxes need to be reformed if the world's seventh most populous country is to realise its full potential, and gain the social and economic benefits that have been proven to flow from the widespread use of mobile phones. The GSMA recommends the removal of the entry barrier of Taka 800 SIM tax to make mobile connections affordable to its unconnected 70 per cent population and bring the benefit of access to information to the people especially from remote rural areas."
The National Budget of 2009-2010 continued to retain the provision of SIM Tax at Tk. 800 for each new connection of mobile subscription. The GSMA urged the government not to wait until next year's budget but to eliminate the SIM card tax immediately, due to the generalised losses for consumers, the government and industry.
Spanning 219 countries, the GSMA unites nearly 800 of the world's mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations.
The GSMA, which represents the interests of the worldwide mobile communications industry, has urged the Bangladesh government to eliminate the SIM card tax.
"The growth of the mobile industry in Bangladesh has come to a halt due to increases in taxes across the board on mobile services. The SIM card tax of Tk. 800 (US$11.6) per connection of each new subscriber is the single largest obstacle to the acquisition of new subscribers, constituting a major barrier to growth and blocking new investments in updated mobile networks that provide broadband via mobile infrastructure," it said in a statement Wednesday.
Ricardo Tavares, Senior Vice President, Public Policy, GSMA commented that the SIM card tax was counterproductive as it represented a wall that low income consumers had to climb before having a mobile phone connection. The SIM card tax increased the total cost of ownership of a mobile phone and actually reduced total tax collection by the government from the industry. It was a negative proposition all round, as consumers lacked access to mobile services, the government would lose with lower tax collection as the number of users declined, and mobile operators had a diminishing customer base. The elimination of the SIM card tax was essential to re-establish the growth path of the mobile industry in Bangladesh and would work in a counter-cyclical way stimulating the whole economy."
"Increased mobile penetration in Bangladesh in recent years has given access to not only voice communication but data access to the internet to rural areas, which were beyond reach otherwise. Today, mobile connections in the country are 46.7 million - 32 per cent penetration but despite this significant growth, Bangladesh remains below its neighbouring countries in terms of mobile and internet penetration. Moreover, mobile adoption growth rates have been consistently falling in the last three quarters and now stand below 3 per cent per quarter, which can be directly attributable to this damaging taxation.
"The GSMA believes that Bangladesh's telecommunications taxes need to be reformed if the world's seventh most populous country is to realise its full potential, and gain the social and economic benefits that have been proven to flow from the widespread use of mobile phones. The GSMA recommends the removal of the entry barrier of Taka 800 SIM tax to make mobile connections affordable to its unconnected 70 per cent population and bring the benefit of access to information to the people especially from remote rural areas."
The National Budget of 2009-2010 continued to retain the provision of SIM Tax at Tk. 800 for each new connection of mobile subscription. The GSMA urged the government not to wait until next year's budget but to eliminate the SIM card tax immediately, due to the generalised losses for consumers, the government and industry.
Spanning 219 countries, the GSMA unites nearly 800 of the world's mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations.