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Monday, October 10, 2005

Mobile Reach : Mindboggling Latent Potential

I recently covered Mary Meeker's perspective - There are 1 billion Internet users in the world today but 2 billion mobile phone users – and Asia is ahead of the US in both categories with 36 % versus 23 % of users and 41% versus 11 % respectively. As it stands, 175 countries signed up to a commitment to give more than half the world’s population access to information and communications technologies by 2015. If governments took the right approach to taxation, that goal could be achieved within five years, yielding huge benefits to developing countries and their people, finds GSM world. GSM association finds that taxation acts as a barrier for users, preventing potentially hundreds of millions of people from affording mobile communications, and holding back economic growth and social development in many countries, based on a multicountry survey.

The study’s key findings are quite insightful and thought provoking - Taxes are disproportionately high in many developing countries – In one third of the 50 developing countries, Direct/Indirect taxes on handsets & services account for 20% of TCO. The study highlights that by eliminating the black market itself, close to three billion USD tax revenues could have been earned bu governments last year. The report finds amongst other things that
- Just one percentage point of lowered tax culd boost the number of mobile users in that country by more than 2% by 2010.
- Eliminating the special taxes could boost the numbers of mobile users in the 19 affected countries by 34 million (or 8%) by 2010.
- The removal of all sales and customs taxes on mobile handsets and services could prompt an increase in mobile penetration of up to 20 percentage points
, according to an analysis by London Business School of the data in this study.
Mobile phones play a major role in reducing the cost of doing business and driving entrepreneurialism across the many developing countries without a widespread fixed-line infrastructure. Mobile phones make it much easier for farmers, fishermen and a host of other business people to find buyers and sellers for their products and services. The mobile industry has made considerable strides in driving costs down through lower handset costs and innovative service solutions for lower income groups, as well as extending mobile coverage to 77% of the world’s population. More still needs to be done. In the light of the findings of this study, more governments now need to take up the baton and re-evaluate the impact of their tax policies on mobile communications. Governments and mobile operators should work together to determine the ideal tax levels for their particular countries.Clealry no force on earth - governments and industry included have the right to hold back powerful technologies like the mobile from reaching the masses.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"