Appfrica Interview on MTN Uganda

Just a quick note to point to an interesting interview with an official of MTN Uganda at:

Appfrica: Interview With MTN’s Erik van Veen – Part 1

These points caught my eye:

(…) revenues per user, are very low in Africa by international standards, and require a low cost operating model if the Operator is to be profitable. If you look at East Africa, new customers joining the mobile category spend about $4 per month – that is not a lot!

(…) I see Asian, especially operators from the sub-continent, playing a bigger role in Africa as they have been able to survive in cut-throat, highly competitive, low tariff environments in their home markets.

(…) And then you have to deal with the cost of doing business in Africa. Infrastructure and productivity remain major hurdles that add costs to the P&L. Our own success, relative to other companies in most African economies, has backfired on mobile operators in Africa, where governments see these as an easy source of tax income. In East Africa, excise tax (read luxury tax) has been institutionalized within the mindset of financial ministerial policy on tax. Uganda has the 2nd highest tax burden on mobile services in the world, Tanzania 3rd. Just think about it – in Uganda we hand over nearly a third of the cost of every call to the government. What a shame!

It is a short sighted initiative that is impeding growth of the ICT industry.

Very interesting read!

Quick side notes:
There was a recent article that Malawi is considering to add (or has already added) a 10% tax on all airtime. I can’t find the Daily Times article online any more (note to myself: make a screenshot next time) See this Daily Times article. (Unfortunately this link is broken in the meantime.)

There’s also White African’s catch phrase to keep in mind.