Govt’s new telecoms bill would ultimately force up retails prices, expert says; ABTD sets up spectrum management regime

19 Feb 2016

A plan by the government of Antigua and Barbuda to adopt a new Telecommunications Bill that calls for a new tax on telecoms companies would ultimately drive up end users costs, says information technology expert Yves Ephraim, as reported by local press. In an interview, Ephraim said that the draft Act includes a clause allowing the state to levy a ‘tax’ of up to 3% of telcos’ annual gross revenues, but argues that where it concerns incumbents such as LIME, Digicel and APUA, that sum ‘could equate to a much larger portion of a company’s actual [annual] profits’. The analyst asserts that the 3% tax on revenue could translate to 20% on an operator’s net income – and more if 25% corporation tax is factored in – meaning that in reality almost ‘50% of the net income of a telecom company [is] going to taxes’. In such a situation, Ephraim says that the only realistic option open to a domestic operator is to adjust its prices to offset the levy. ‘As a business person, if I were faced with a situation where the government is saying to me they could be taking away almost 50% of my money, I could freeze wages, freeze employment and take on new workers, [and] slow down my investments.’

In an unrelated development in the country’s telecoms market, the Antigua and Barbuda Telecommunications Division (ABTD), a department within the Ministry of Information, Broadcasting, Telecom, Science & Technology (MIBTST), has announced the successful setting up of a new integrated telecommunications management system (iTMS) to oversee the licensed use of spectrum across the country. According to a report from online portal Caribbean News Now, the iTMS was developed by PW Consulting and customised for the ABTD’s requirements with a view to improving the allocation of spectrum frequency.