By Mohamed Jaward Nyallay
The Deputy Director General at the National Telecommunications Commission (NATCOM), Daniel Kaitibi has told Politico that the country has lost at least 12 million minutes per month of voice call revenue to social media services like Facebook, Whatsapp and others.
This huge drop in voice calls has occurred in the span of ten years. And this drop means the commission gets less money from mobile operators for calls that come through the gateway of the country.
“Traditional voice calls are really down now. Back in the days we were clocking something like 17 million minutes per month. As we speak it’s only five million minutes per month. Normally what we do with those minutes [is that] we ask the operators to charge 32cents, then we as a commission or country we get 9cent,” Kaitibi said on Thursday.
He was speaking immediately after a session on Over the Top Services (OTT) and the need for regulation.
OTTs are technology businesses that provide audio, video and other media services whiles transmitting via internet as a standalone product.
The session was part of the three days conference that’s jointly hosted by NATCOM, the Commonwealth Telecommunications Organization (CTO) and the Government of Sierra Leone. The conference focused on a range of issues regarding improvement of broadband technology in Sierra Leone. Local and international experts in various Information Communication and Technology field participated in the event convened at the Bintumani Hotel in Freetown.
Kaitibi’s statement highlights the challenge the telecom regulator has in raising more revenue for the country. And the concerns are all over the world.
According to one of the panelists in the session, Graham Butler, Chairman Bitek Global Limited, the phenomenon of OTTs poses a serious threat to revenue generation for individual countries in Africa whiles it enriches OTTs in the process.
“We need a common plan for Africa. We are at a severe danger if we don’t do something about it. OTT services pay no taxes. They provide no jobs for the countries that use their services,” Butler said.
Bitek Global Limited is a company that provides telecommunication regulators across the world with network protection solutions. They work with countries globally to help guide their telecommunication policies and recover tax revenues.
The regulation of OTT services is a major challenge across the world, especially in developing countries. OTTs provide several services today that mobile operators provide, including voice calls, video calls, financial transaction, movie downloads, and streaming services.
Common OTT services in the world include Uber, Facebook, Netflix, Amazon and thousands more. Experts say the major reason why these companies don’t pay more on what they make in the form of taxes is that in most of the places they operate they don’t own tangible infrastructure.
“Uber which is the largest taxi service company in the world doesn’t own a single car. Facebook does not have content; it is your content. Right now, some of you are on Facebook whiles I am talking,” Dr Martin Koyabe said during his presentation. Dr Koyabe is the Technical Support and Consultancy Manager of CTO.
However, Facebook, was represented at the conference, denied the claims of Butler. In justifying their business model, Fargani Tambeayuk, Africa Public Policy Manager for the social media company, said they don’t pay direct money to NATCOM because they do not use Sierra Leone’s infrastructure to provide their services.
“We do pay taxes. Our model of business is different from mobile operators. We don’t have operating license like mobile operators. Like mobile operators we don’t use national resources like the spectrum,” he said.
Tambeayuk added: “A lot of mobile operators make a lot of money from OTTs.”
Data prices in Sierra Leone are still among the highest in the sub region. The cost of 225MB across the two major mobile operators (Africell and Orange) is just under $1.
Telecom experts in Sierra Leone and the world have said more people are now using data for calls than ever. The high demand for data has kept data tariff s high in the country. However, mobile operators in Sierra Leone are still missing out on a huge revenue chunk, on data.
“If mobile operators are running at a loss then I don’t know what system they are using here. But the decline might be because they are still relying on 2G and SMS revenues,” Tambeayuk said.
Currently there is no law to tax data calls. This reaffirmed Kaitibi’s statement that Sierra Leone is losing on data.
“If we don’t go into data and start getting something, then the country loses a lot of money,” he said in an interview.
However, getting more money from companies like Facebook is not the priority now. Kaitibi said despite the huge loss, the commission has more urgent problems to fix.
“It is something that we are looking at but at the moment we are looking at the ones that are pressing; SIM-card registration, infrastructure regulations. We have five or six that we have looked at and they have already been approved, after which we will come to OTT,” he said.
Like so many other OTTs, Facebook does not pay for license to operate in Sierra Leone. It is also not covered by any form of tax, except what they make from advertising. The social media app makes 85% of its revenue in advertising.
Experts during the conference called for regulations to cover OTT services like Facebook, a call which the Facebook representative, Tambeayuk, cautiously accepted.
“There is regulation on voice and no regulation on data. The OTTs won’t share their advertising profits,” Butler said.
On average, Facebook makes just over $7 per user in developing countries like Sierra Leone.
Koyabe also concurred with Butler’s statement. However, Koyabe warned about the danger of stifling innovation.
“We should apply more smart regulations that will create an equal platform for everything else to compete. It is punitive for a regulator to stifle innovation,” Koyabe said.
Despite it not being a priority for NATCOM currently, but Kaitibi still acknowledged the need for this.
“We need to have the laws. You cannot just wake up one morning and you start regulating them. We don’t have any regulation on OTTs or how to regulate them. We need to have the policy in place before we start,” he said,
“For instance, how much should be in that regulation? If they violate A, B and C, what do you do? What is the punitive measure? So, these are the things that we should sit as a commission and look at and then finalize,” he added.
Like Koyabe, Tambeayuk agrees on a more rational way to regulate OTTs. However, Tambeayuk stressed the need to look beyond taxation for a sustainable policy.
He said: “We are not against regulation. But it should be done properly. In Uganda there was a tax placed on OTTs. The percentage of usage dropped significantly. That is a case for bad regulation.”
“The way we should regulate OTTs should go beyond taxation,” he added.
© 2019 Politico Online
