In August 2019, the Kenyan Parliament started deliberating on a bill that would empower the Kenya Revenue Authority (KRA) to tax digital and social media platforms operating in the country.
While Kenya works on legalising collection of income tax from app owners and social media platforms, Nigerian telecom providers are demanding something similar from the government.
According to a report, Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), opined that social media platforms and Over-The-Top (OTT) services like Facebook, Twitter, and WhatsApp, should be licensed by the Nigerian government since they generate huge revenue from the country.
The basis for the telcos’ request is that rather than use SMS, Nigerians opt for social messaging platforms.
ALTON claims that unlike social networking platforms, it is licensed to provide communication services, for which it pays an annual operating levy.
Techpoint delved into the conversation with Gbolahan Awonuga, ALTON’s secretary, who further explained how platforms like Facebook and WhatsApp are drawing revenue away from voice and SMS platforms.
“Today, you can call and text with WhatsApp or Facebook, you can use Skype or any of those other social media where you don’t need airtime and this is affecting the revenue of the telcos,” says Gbolahan.
Gbolahan insists that more people are trooping to these social networks since they are free to use and the data consumption rate is relatively low compared to the ₦4 ($0.011) charge per SMS.
“For instance, sending WhatsApp messages just consumes a little from your data when compared to making voice calls or sending SMS.”
For Gbolahan, telcos’ revenues from SMS are dwindling while OTTs keep generating income without encountering any bottlenecks.
When asked about the revenue telcos make from data subscription, the secretary said data, being highly subsidised in Nigeria, does not generate as much revenue as SMS and voice calls do.
However, in keeping with findings made by Techpoint last year, the price of Internet subscription — when measured against Nigeria’s minimum wage — is still high compared to some African countries.
ALTON’s secretary insists that any social networking platform that wants to play in the Nigerian space should be licensed and levied by the Nigerian Communications Commission (NCC) and if they refuse to comply, they should be restricted from functioning in Nigeria.
“These guys have no physical presence here, they do not experience right of way issues or the cost of setting up telecom infrastructure…they do not pay taxes or levies to the government for all their services like the telcos do,” Gbolahan avers.