‘Gov’t, Telecom Operators Exploring Ways To Increase State’s Share Of Sector Revenues’

Telecom operators are working with the government to find ways to increase the state’s revenues from the sector without harming telecom companies, Umniah CEO Ihab Hinnawi said on Sunday.

“We recently met with the government to look into mechanisms that do not negatively affect the profits of operators and result in hikes in prices of services offered to customers, but at the same time increase the government’s revenues from the sector,” Hinnawi told reporters.

“These alternatives may include amending the prices of some services that do not directly affect the overwhelming majority of mobile users in Jordan,” he said.

Late June, the government said it was looking into the possibility of increasing its revenues from telecom companies while also weighing the impact on the sector.

Several levies are currently imposed on the telecom sector including a 16 per cent sales tax, a 12 per cent special tax, a 24 per cent income tax and 10 per cent as revenue sharing.

The Telecommunications Regulatory Commission recently started studying the impact of raising the revenue sharing percentage.

The study seeks to measure the impact of a gradual 2 per cent increase — not to exceed 20 per cent — on telecom companies in the country.

“Telecom operators understand the government’s need to increase its revenues in general, but the sector cannot tolerate more taxes or fees,” Hinnawi said.

Telecom companies contribute about JD300 million annually to the Treasury in taxes and fees, heads of the Kingdom’s telecom operators recently told The Jordan Times.

In a bid to reduce operational costs, telecom companies recently began looking into sharing infrastructure, Hinnawi noted.

“Telecom operators have already started working on this issue, but it is still in the initial stages and in the future we will see more cooperation in sharing infrastructure to reduce costs,” he added.

The Umniah CEO also said subscribers to the firm’s Third Generation (3G) services exceeded 250,000, and that he expected this figure to more than double by the end of 2012.

Umniah, which launched 3G services in June, attracted more than 60,000 customers that access the 3G Internet via dongles and over 200,000 who use the service on mobile devices, according to Hinnawi.

The company invested more than JD100 million on licensing and network infrastructure.

Umniah is the third mobile operator in Jordan to launch 3G technology, which IT experts have stressed repeatedly, will help increase Internet penetration in the Kingdom, where 55.9 per cent of the population were registered as Internet users by the end of June.

Orange Jordan was the first to launch 3G in March 2010, with Zain Jordan following suit in 2011.

Jordan Times