Telcos lose N20bn annually to multiple taxation

The Managing Director of Airtel Nigeria, Mr. Segun Ogunsanya, has decried incidence of multiple taxation on telecommunications companies, saying that revenue loss from idle or shut down base stations represents the main source of negative impact of multiple taxation and network vandalism for the industry.

Speaking at the BusinessDay CEO’s forum in Lagos, on Wednesday, he said that two to three per cent of Nigeria’s sites were affected by arbitrary shutdown and vandalism at any given point in time.

“It is estimated that increased operating costs and lost revenue cost around N9bn each year to the telecoms industry or about N20bn if most of the arbitrary fees in some key states are upheld,” Ogunsanya said.

He, therefore, called on the government to unify taxes under one code and bring to book vandals who deliberately destroyed telecoms infrastructure.

Commenting on the immediate implementation of the National Broadband Plan, the Airtel MD and Chief Executive Officer said achieving the NBP would require possibly up to 50 per cent more than the $3bn to $4bn Nigerian operators had been spending on capital expenditure annually

“This is an increment that will need to be justified by a material change in operating conditions that would improve investment confidence.”

He also noted that for the incoming government to succeed, it must show commitment to its anti-corruption campaign by ensuring the right leadership for critical sectors was put in place.

“The incoming government should develop and implement a robust economic blueprint showing key milestones and timelines and reorganise the public sector so that it becomes more efficient, effective and productive,” Ogunsanya said.

In another development, the Airtel boss stated that with 78 per cent mobile penetration as of December 2014, there was “massive untapped market potential” for the country.

He said broadband adoption was set to rise as demand for more stable Internet grew from the residential and business segments, saying t hat the Nigerian telecoms market offered multiple growth opportunities with the development.

According to him, 47 million subscriptions are expected between December 2014 and December 2019, “and this demonstrates massive untapped market potential and continued strong total telecoms revenue growth driven essentially by mobile data.”

Ogunsanya noted that strong growth was expected from mobile financial services over the forecasting period. “Operators should, therefore, ensure they are able to offer products to the large unbanked population of Nigeria, while growing demand for mobile apps and e-commerce will have a positive knock-on effect on mobile operators,” he added.