PROPOSED LEVY IS TOO EXPENSIVE, SAYS CELTEL KENYA

Telecoms

Mobile telephone services provider Celtel Kenya has petitioned the Government to halt its plans to charge telecommunication firms a levy for rural communications development.

The Government intends to set up the Universal Access Communications Development Fund to be funded by telecommunications companies. The companies will be required to contribute one per cent of their gross annual revenues to the fund. The proposal is contained in the Information Communications and Telecommunications Bill, 2006, which is ready to be tabled in Parliament. Celtel said yesterday that if MPs pass the Bill, communication services in the country will be unaffordable. "Kenya is among the countries with highest tax on airtime in the world, and this levy will make it worse," Celtel chief executive Gerhard May told reporters at Nairobi Serena hotel.

The vision of universal access is quality communication services that are accessible, available, and affordable and that lead to enhanced and sustainable rural communications development. Communication Commission of Kenya says the fund would provide an enabling environment and intervention for the development and implementation of communication infrastructure and services in rural and under-served areas.

However, May said his company has in the past connected areas initially not served by any means of communication, adding that telecommunication companies don't need government prodding to move to such areas. "We know how to do our business, and we don't need the services of the fund to do our work," he said.

Celtel's director for regulatory affairs, Clare Ruto, said that instead of asking mobile phone companies to contribute one per cent of their gross revenues to the fund, the Government should identify areas it wants covered. Government should tell us: "use one per cent of your revenues to covers this and that place.' It should not ask us to contribute to a fund which will consume money to run," she said.

The Nation