Senegalese Tax May Cut Sonatel’s Revenue by 10% as More Callers Go Online
A tax on international phone calls to Senegal may cut revenue at Sonatel (SNTS) SA, the country’s largest telecommunications company, by at least 10 percent, said Mamadou Aidara Diop, a member of the company’s board and secretary- general of the Labor Union of Sonatel Workers.
Senegalese overseas will likely turn to Internet-based communication such as Microsoft Corp. (MSFT)’s Skype Technologies SA rather than pay the rates, which came into effect Sept. 1, Diop said in an interview in Dakar, the capital, Sept. 2.
“People will find alternative methods to call,” he said. The tax adds 49.2 CFA francs ($0.10) per minute on calls to mobiles from outside the country, a 53 percent increase on previous rates. For calls to landlines, the extra tariff is 75.45 CFA francs, according to a decree from President Abdoulaye Wade that was published on Seneweb.com Aug. 29.
International calls account for as much as 70 percent of revenue at Sonatel, Diop said. When the government enacted a similar tax last year, calls from abroad dropped 15 percent, he said.
Sonatel also operates in Mali, Guinea-Bissau and Guinea. It is 42 percent-owned by France Telecom SA (FTE) and 27 percent by Senegal’s government, according to the company’s website, and is the biggest company on the Abidjan-based Bourse Regionale des Valeurs Mobilieres with a market capitalization of 1.4 trillion CFA francs.
Strike, Court Appeal
The labor union at Sonatel may hold a strike later this month, Diop said. Sonatel is appealing the tax in court, claiming Wade’s decree did not conform to “legal norms or international law,” he said, without giving details.
Papa Dieng, a special adviser to Wade, did not answer calls made to his mobile phone. Ndogo Diaw, director of the Agency for Regulation of Telecommunications and Postal Services, was not available, according to a person who answered his phone.
The tax revenue will be used to construct public housing for migrant workers, as well as water wells and internet centers in rural areas, according to Wade’s decree.
“In reality, this money is not going to enter into the government Treasury,” Diop said. “Government has said they are not going to put this into the Treasury, they’re going to put this into a fund that has been created. But it will not enter into the control of the Finance Ministry. There is a problem of transparency.”
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