Kenyan operators likely to increase prices in response to tax changes

20 Jun 2008

The Kenyan government is likely to introduce a 10% excise duty on CDMA networks which is expected to be passed on to customers of Telkom Wireless, Popote and Flashcom. The excise tax is being implemented to include CDMA operators, after their rivals, Safaricom and Celtel, complained on the grounds that they were paying excise tax. As long as Parliament passes the bill, wireless operators across the two technology platforms will now pay the 10% tax.

Joe Kariuki, the CEO of Flashcom, said that the Telkom Kenya fixed line product should also have been subjected to the tax because it is the main competitor to CDMA lines. Kariuki said, ‘We will be asking that the tax be removed or if it has to be maintained it should be imposed on all Telkom phone products since we are in competition’.