By Sorie Fofana……………………….
Before the outbreak of the Ebola Virus Disease in Sierra Leone in May 2014, the telecoms industry was the fastest growing industry in the country.
Nobody has ever bothered to ask why Mobitel, Datatel, Tigo, Comium, Celtel, Zain, Millicom and other telecoms operators did not survive for long in Sierra Leone. The answer is very simple: over taxation of telecoms operators by successive governments, played a pivotal role in the collapse of the operations of some or most of these telecoms operators.
When Comium finally collapsed, the company could not even afford to pay backlog salaries to their Sierra Leonean workers let alone, pay the huge debt they owe contractors/suppliers and even NATCOM in license fees.
Smart Mobile is currently facing a major financial crisis. Several attempts have been made by their shareholders to sell the company but their efforts have proved unsuccessful.
The problem with Smart Mobile is that, it is hugely indebted. It will be difficult for any investor to buy over Smart Mobile, simply because, the company is unattractive. Its services do not go beyond Waterloo. They have a totally obsolete operating system called ZTU, which is a 2009 model.
The company’s senior expatriate managers have all fled the country leaving the company to be jointly managed by some senior local staff members and three NATCOM officials assigned to the company.
Africell & Airtel
The two biggest telecoms operators in the country are Airtel and Africell. They are the biggest tax payers and the largest employers in Sierra Leone.
If anyone of these two companies is forced to close down, it will seriously affect the revenue base of the government.
On top of that, thousands of young Sierra Leoneans employed by these two companies will be put out of job and it will adversely affect their livelihood.
These two companies have reached the dead end. They have been over taxed to the extent that, some of the new taxes introduced by NRA overlap.
How can these telecoms operators be paying Spectrum Fees to NATCOM and NRA has gone ahead to introduce a 3% Royalty Tax on these companies? What is the difference between Spectrum Fees and Royalty Tax? Even NRA officials could not explain the difference between the two taxes.
The Way Forward
It is needless to restate that, telecoms operations are cost intensive. All their equipment are bought in United States dollars.
The lack of regular electricity supply means that, the telecoms operators have to rely on a backup system to ensure that, their equipment are regularly powered.
The exchange rate of the US dollars to the Leones has gone up by 75% since 2010.
Even during the Ebola outbreak (2014 to 2015) the telecoms operators did not sack a single member of their bloated national staff.
Even with the high cost of equipment, the telecoms operators continue to modernize and expand their services to far flung areas in the country that have never benefited from the modern form of GSM and internet communication.
Since NATCOM is planning to organize another Consultative Meeting between service providers and subscribers today at the Bintumani Hotel, we hope that, the issue of tariffs normalization will be favorably considered. Otherwise, one of the two biggest telecoms operators in the country will close down, because, their shareholders cannot continue to bail them out, every financial year.
If either Africell or Airtel closes down, it will lead to massive unemployment and a major loss of revenue for the government.
We hope that, the dynamic Chairman of NATCOM, Momoh Konte will reason with the telecoms operators and allow the normalization of tariffs to come into force, without any further delay.
We can’t afford to allow either Africell or Airtel to close down just because we do not want them to normalize their tariffs in line with their high cost of operations. A stitch in time saves nine!
May common sense prevail!