TELECOMS

SIERRA LEONE: QUESTIONS RAISED ABOUT ANNUAL RENEWAL FEES FOR MOBILE OPERATORS

A columnist in Sierra Leone’s Leone’s Concord Times questioned whether it was wise for the Government to be charging mobile operators annual licence renewal fees:”The announcement recently by the Minister of Finance - MoF of the planned $500,000 licence (renewal) fees for mobile operators here in Sierra Leone may not be only wrong, but also out of place, counter-productive and backward.

It goes against the grain in relation to best practices in the global marketplace. In no shape and form am I trying to pounce on the ministry for trying to source more funds for the funding of the state's ever needy consolidated fund. However, arbitrary taxation on the part of the government must not go unchecked. If you think donor fatigue is bad try tax payer fatigue. Tax payer fatigue from the business sector could turn out to be extremely disastrous for the overall economy.

Look, we all know that the mobile operators collectively are making loads of money and it is possible that the state's 'bean collector' (NRA) may not be getting the true nature and picture of the revenue streams of these players. Nevertheless, bringing these licence fee structure without any consultation with industry stakeholders (operators, the regulator and the sector ministry and to some extent the trade ministry) is asinine at worst or misplaced at best. Actually, the NRA must get a reality check on this matter. It must try to exhaust currently outlaid tax avenues (sales and corporate taxes) within the sector and the mobile operators in particular. It might be possible to identify some leakages or holes on these revenue streams with the requisite expertise.

Licensing telecom operators is definitely not within the purview of MoF or the NRA. Statutorily, that is stated in the job description of the independent telecom regulator (NTC - the national telecommunications commission) within the Telecommunications Act of 2006. In fact, the fees assessed for the licences (individual or general/class) form the financial backbone of the independent regulator. Indeed, the regulator gets parliamentary appropriation, however, that will make up a small percentage of the total budgetary requirement of the regulator.

As a patriotic citizen, I am very curious to know where exactly MoF got the statutory power to act on behalf of the sector regulator. I painstakingly went through the Financial Act of 2006 and the NRA Act of 2002 without any evidence of such power. In fact, as a result of my examining these laws, I am of the unwavering conviction that something is seriously wrong with this decision and move by MoF. We must not encourage 'jurisdiction capture' (lacking statutory backing) by anyone MDA especially when the boundaries are statutorily drawn or demarcated. The invasion of jurisdiction boundaries definitely serves to retard good governance within the public sector and impugns legitimate authority.

Telecommunications licensing must not be confused with that of mining where signature and royalty contracts are the rule of the day. Telecom licensing is more science than art and it has a whole body of knowledge that MoF might not be familiar with at this moment.

The ministry does not have the bandwidth for the professional and effective regulation of our telecom space. There are so many intricacies involved in devising licensing regimes for the telecom sector and ours may not be any easier due to the lack of policy and regulatory leadership for the government's liberalization effort in the last five years.

We now have a national law that vests finite power with an independent regulator in the name of the NTC for the regulation of the sector. The government and the country as a whole must rest with the regulator the complex tasks and duties of regulating, monitoring and serving the industry players along with protecting the interests the government and people as a whole.

Again, I am in agreement with the need to revisit the licensing structures for the entire sector (all segments of the sector); however, arbitrary and discretionary decisions or actions will foster an uncertain environment for the industry players. It gets even worse when such decisions or directives are coming from an MDA that is technically and jurisdictionally outside the realm of setting sector policies.

Our parliamentarians had been prudent in establishing the mandates of the regulatory authority through the Telecom Act of 2006. In preventing conflicts among the regulator and stakeholders and other institutions, the mandate clearly defines the role of the regulator. If anything, in 'fertilizing the nation's revenue streams (from a given sector), the ministry could work with a quasi-independent or autonomous regulatory body such as the NTC or the planned agency (securities market regulator) to be statutorily empowered to regulate our planned securities market or stock exchange. In this case, MoF must seriously consider the taxation rule of 'hypothecation'. There are so many things (universal service obligations, spectrum assessment and monitoring, etc.) that a telecom regulator must address financially that are cost intensive and directly connected to the regulatory fees or surcharges assessed to sector operatives or participants.

My advice to the finance ministry, work with the industry 'overseers' when it comes to anything sector or industry related. In a free market economy like ours, the licensing of telecom industry players must be left with the agency mandated by statutory means to perform such function. Taking Sierra Leone into context (absence of anti-trust and competition laws), NTC (the industry's 'umpire-supremo'), which is a quasi-independent and autonomous body has been provided with the statutory and technical bandwidth required to devise industry licensing structures and license sector participants.

Finally, MoF must see no pain in allowing the NTC to perform its fiduciary duty of regulating our growing telecom sector without any political interference or pressure. The ministry must work with the NTC to address this issue of cellular operator licensing immediately and effectively and the actual operators must not be forgotten in the mix”.

Concord Times

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