Mobility and GDP

It is known for several decades, telecom is a powerful economic growth engine (remember the JIPP curve and the link between GDP and subscriber numbers). Mobility has relayed fixed telephony, but the rule is almost the same. The larger subscriber numbers and phone usage, the richer is the country. A new study by Deloitte reveals that in a developing country, 10% increase in mobile penetration will lift country' s GDP growth rate by 1.2 points. Governments do not have to miss the target; mobility is not a luxury good, but can be very profitable for the community. In some countries, taxes can account from 25% to 45% of the total ownership costs, while the worldwide average is about 17%. Cutting taxes on mobility (handsets and services) is the way to directly increase mobile penetration, and indirectly positively impact GDP growth and country wealth medium term. High taxes on mobility is only short-term oriented. A right mix should be found by governments and operators for the benefit of all.

Comments

[Solofo RAFENO]

This idea of cutting mobile services tax has been on the street for a while. It make sense for those developing countries that could leverage on others tax revenue streams. Unfortunatly, most of them do not have any recurrent, reliable budget funding source except mobile operators.
Conclusion: Reduced telecom tax might be a very good idea but the only best one is a very competitive environment: which means a minimum of 4 mobile operators/country, an open international interco, a regulated VoIP services.

[Jean Arnal]

You are right. The main interest of tax cutting is that it is much more easier to implement than introducing 2 or 3 or 4 operators in competition, but competitive environment cannot be escapable in a mid-term. Both are necessary.