Tax, power, prices limit rural Africa mobile use

NAIROBI – Africans in rural areas still have limited access to telecoms services, but lower taxes, cheaper handsets and less costly power for transmitting stations would boost their numbers, operators said on Friday.

Mobile phone use has surged in the world’s poorest continent, but the penetration rate is still only 21 per cent of the total population, and subscribers are mostly in urban areas. Most of Africa’s rural areas are served by patchy telecoms infrastructure, but industry players say that could change if it were cheaper to power mobile phone base stations in those areas.”In the rural areas, the only impediment is lack of power, which means that we have to run the site either on generator, or we have to find alternative means of power,” Michael Joseph, CEO of top Kenyan mobile phone firm Safaricom, told Reuters.He said mobile phone firms could also share base stations to reduce costs, as long as it were done fairly, he said.”I don’t want to spend all the money to build masts, putting all the power, and all I do is to get someone to share and pay a small cost.”Safaricom and its only competitor Celtel are already sharing some masts, and the company has built five base stations powered by wind, he said.The high price of handsets also limits rural access.Chris Lundh, CEO of Rwandan telecoms firms Terracom and Rwandatel, said his company has tendered for a bid to provide 53 355 low-cost phones intended solely for rural users.Their bid was for a US$20 handset that included US$15 worth of airtime.Taxation on mobile phone airtime also raises costs.A study by trade group GSM Association shows East African countries levy taxes of 25 to 30 per cent on mobile services, compared with an average of 17 per cent across the continent.Several governments on the continent plan to roll out networks at subsidised rates in rural areas using a fund to which mobile operators contribute a percentage of revenues.Nampa-ReutersMost of Africa’s rural areas are served by patchy telecoms infrastructure, but industry players say that could change if it were cheaper to power mobile phone base stations in those areas.”In the rural areas, the only impediment is lack of power, which means that we have to run the site either on generator, or we have to find alternative means of power,” Michael Joseph, CEO of top Kenyan mobile phone firm Safaricom, told Reuters.He said mobile phone firms could also share base stations to reduce costs, as long as it were done fairly, he said.”I don’t want to spend all the money to build masts, putting all the power, and all I do is to get someone to share and pay a small cost.”Safaricom and its only competitor Celtel are already sharing some masts, and the company has built five base stations powered by wind, he said.The high price of handsets also limits rural access.Chris Lundh, CEO of Rwandan telecoms firms Terracom and Rwandatel, said his company has tendered for a bid to provide 53 355 low-cost phones intended solely for rural users.Their bid was for a US$20 handset that included US$15 worth of airtime.Taxation on mobile phone airtime also raises costs.A study by trade group GSM Association shows East African countries levy taxes of 25 to 30 per cent on mobile services, compared with an average of 17 per cent across the continent.Several governments on the continent plan to roll out networks at subsidised rates in rural areas using a fund to which mobile operators contribute a percentage of revenues.Nampa-Reuters