NetOne’s Kangai rings alarm as “over the top” Whatsapp eats into revenues

NetOne’s Kangai rings alarm as “over the top” Whatsapp eats into revenues

VICTORIA FALLS, April 20 (The Source) – The managing director of state-owned mobile operator NetOne, Reward Kangai has bemoaned the effect of social network applications such as Whatsapp, Viber, skype and others, saying they are eating into mobile network operators’ revenues while enjoying unfair competition as they do not pay tax.

Kangai told reporters in Victoria Falls at the recent Innovation Africa Digital Summit that the industry was full of “over the top” players who ride on existing infrastructure without paying taxes.

He said there was a need for government to come up with modalities that would allow locally run applications that would generate money for local companies.

“In this telecoms industry capital expenditure is very high and increasing because of demand for broadband services. We have to continuously upgrade our systems, which needs capital but you find there are some operators who get returns from use of our networks. Our revenues are going down because there are some clever over-the-top players who ride on our infrastructure for free and use our services for their benefit yet they don’t pay taxes,” said Kangai.

“We know that customers are enjoying all these services such as Whatsapp, Viber and others but what they don’t know is that they use our expenditure.”

He implored government to investigate the sector.

“There is a need for a consolidated approval from government because there has been no common position in dealing with this. This is why we are (looking at) having our own applications that can generate money even for the government through taxes,” he said.

NetOne, the country’s oldest mobile phone operator, is also the second biggest, with 3,3 million subscribers according to latest Potraz data.

The firm is working on a number of packages – one of them 4G service and expects a 50 percent increase in subscribers by the close of 2015, Kangai added.