The Impact of Taxation on the Development of the Mobile Broadband Sector
Authors: Dr. Raul L. Katz Dr. Ernesto Flores-Roux Dr. Judith Mariscal ABSTRACT
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Increase in Wireless Penetration Resulting Increase in Wireless User Base Resulting from Changes in Taxation from Changes in Taxation (in percentage points) (in percentage)
30.0 300.0 276.2
25.0 24.0 250.0 200.8 20.0 200.0
15.0 150.0 11.4 10.0 9.0 100.0
4.6 45.7 5.0 50.0 40.3 1.3 0.4 0.4 0.1 0.9 4.0 4.3 3.2 2.9 4.0 0 0 Mexico Brazil Bangladesh South Africa Malaysia Mexico Brazil BangladeshSouth Africa Malaysia Reduction of 1 p.p. Reduction to benchmark rate Reduction of 1 p.p. Reduction to benchmark rate
Note: Malaysia is considered to be the benchmark at 6.1% The Impact of Taxation on the Development of the Mobile Broadband Sector
Table of Contents $
Executive Summary 2
1. Background And Study Objectives 9
2. A Typology Of Mobile Taxation 11
3. Cross-Sectional Analysis Of Taxation Impact On Mobile Broadband 16
4. Case Studies On Mobile Broadband Taxation 19 4.1. Mexico 19 4.2. Malaysia 19 4.3. Brazil 20 4.4. Bangladesh 21 4.5. South Africa 21
5. Quantitative Assessment Of Impact Of Taxation On Mobile Broadband And The Economy 23 5.1. Theoretical framework 23 5.2. Economic impact of broadband 24 5.3. Economic impact of taxation on mobile broadband 25
6. Policy Implications 31
Appendices 35 A. Study team 36 B. Database of taxation approaches 37 C. Case studies: country context 43 D. Economic impact of broadband 51 E. Economic impact model assumptions 54 F. Bibliography 56
1 The Impact of Taxation on the Development of the Mobile Broadband Sector
Executive Summary
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Figure A. Mobile Service Taxation Approaches
Service taxation Universalization Direct taxation Direct taxation and Service tax of service without sector sector specific taxes revenue discrimination maximization
Sector discrimination based on moderate import duty and telecom Malaysia South Africa Mexico Tanzania tax Sector discrimination China based on high import duty but no telecom tax Argentina Venezuela
Sector discrimination Yemen based on high VAT and import duty but low Turkey Handset taxation handset specific tax
Handset tax revenue Brazil Bangladesh maximization
Universalization and Protectionism Sector distortion Tax maximization and sector distortion protectionism
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38% 38% Bangladesh 28.6 Wireless penet 0% 0% 0 3750 7500 11250 15000 razil Africa B GDP per capita Malaysia Mexico Bangladesh South (*) For emerging countries
Pre pay (*) For emerging markets Post Paid Source: ITU; Wireless Intelligence; Merrill Lynch; World Bank; TAS analysis
Source: ITU; Wireless Intelligence; Merrill Lynch; World Bank; TAS analysis
1 In fact, as of March 2010, Brazil reached 92.5%, while Mexico achieved 87%. 3 The Impact of Taxation on the Development of the Mobile Broadband Sector
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Figure E. Taxation Approach to Wireless Services in the five countries under study
Services Handset Country VAT Other Fixed Customs Other Fixed Taxation Approach VAT Taxes Taxes Duty Taxes Taxes Malaysia 5% ------10% ------Universalization and protectionism South Africa 14% ------14% 7.60% ------Protectionism
Mexico 16% 3% (*) - - - 16% 0.10% ------Sector distortion Brazil 33% 5.1% - - - 33% 19% 9.30% $13.35 Tax maximization and Bangladesh 15% 35% $11.76 15% 12% - - - $11.63 sector distortion
(*) Applies to all telecommunications services except for fixed and mobile broadband Source: Deloitte (2008); updated by TAS
4 The Impact of Taxation on the Development of the Mobile Broadband Sector
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Handset penetration
upgrade penetration telecom revenues - GDP TCO economic spillover ( GDP) ATR usage penetration tax revenues (ATR) Usage MOU/sms/kb
Elasticity (price, ATR is spent/invested by Required GDP) calculations Government return on Can Government generate in capital (ATR) spillover/welfare more than to create general GDP by collecting ATR? welfare
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2 We believe this model to be consistent with the recent study validating the “critical mass” theory of broadband economic impact which concludes that for less developed European countries, a 10% increase in broadband penetration results in 0.08 percentage points of GDP growth (see Appendix C) 5 The Impact of Taxation on the Development of the Mobile Broadband Sector
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3 Examples of sources are Economist Intelligence Unit, Business Environment Risk Intelligence, WEF, World Bank 4 Among many other criteria, it explicitly captures the efficiency of fiscal policy, and thus, can be considered as a guideline on how well governments will spend taxation on telecommunications services. It also captures the efficiency of fiscal policy (taxes and spending) as it identifies the effect of the following variables: s #ONSISTENCY BETWEEN PLANNING AND SPENDING EXECUTION s %FlCIENCY OF REVENUE MOBILIZATION PUBLIC EXPENDITURES s "UDGET MANAGEMENT s 4HE EFlCIENCY OF THE COUNTRYS TAX COLLECTION SYSTEM 5 See Appendix E 6 The wide range of revenue gains is due to the fact that foregone taxes are compensated with taxes on sector growth due to lower taxation plus the 6 economic spill-over of broadband The Impact of Taxation on the Development of the Mobile Broadband Sector
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7
The Impact of Taxation on the Development of the Mobile Broadband Sector
1. Background And Study Objectives
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Figure 1: Study approach
Prior reports to Desk GSMA Desk Broadband GSMA on research input research impact models taxation
3. Develop economic impact model 1. Create Typology of mobile taxation 2. Select 5. Prepare approaches 4. Develop case countries to final report be studied studies of countries with modified taxation schemes
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7 In particular, Deloitte. Global Mobile Tax Review 2006-2007, Frontier Economics. Taxation of Mobile services in Sub-Saharan Africa 2008, Deloitte. Taxation and the growth of mobile in East Africa (2007) and AT Kearney. Asia Pacific Mobile Observatory (2009) 8 See Appendix B 9 The Impact of Taxation on the Development of the Mobile Broadband Sector
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10 The Impact of Taxation on the Development of the Mobile Broadband Sector
2. A Typology Of Mobile Taxation
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Figure 2. Service Taxation Approaches China South Africa Turkey
Mexico
Telecom-Specific Fixed taxes
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9 See all raw data on taxation approaches by country in Appendix B. 11 The Impact of Taxation on the Development of the Mobile Broadband Sector
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Figure 3. Service Taxation Approaches by Country
Continent Universalization of Direct taxation Direct taxation and Service tax revenue service without sector sector specific taxes maximization discrimination
Africa Angola, Botswana, Cameroon, Chad, Cote Burkina Fasso, Ghana, Kenya, Madagascar, Lesotho, S. Leone, D)VOIRE $2 #ONGO %GYPT Nigeria, Rep. Congo, Senegal, Tanzania, Swaziland Ethiopia, Gabon, Gambia, Tunisia Uganda, Zambia Guinea, Guinea Bissau, Malawi, Mauritania, Mauritius, Morocco, Mozambique, Rwanda, Seychelles, S. Africa, Zimbabwe Middle East Syria, Yemen Iran, Jordan Turkey Asia Pacific Bhutan, China, Indonesia, India, Philippines, Samoa Cambodia, Sri Lanka Bangladesh, Nepal, Lao, Malaysia, Myanmar, Pakistan P. N. Guinea, Thailand, Vietnam Latin America Paraguay Bolivia, Chile, Guatemala, Argentina, Brazil, Dominican Republic, Nicaragua, Peru, Trinidad Colombia , Mexico Ecuador, Venezuela & Tobago Eastern Europe Azerbaijan, Georgia, Albania, Ukraine Kazkhstan, Russia, Uzbekistan Western Europe Austria, Bulgaria, Cyprus, Greece Czeck Rep., Denmark, Estonia, France, Finland, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK
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Figure 4. Handset Taxation Approaches S. Africa Turkey
Customs Duty Telecom-specific
None Low High None Low High
None None
VAT Low Fixed Low
High High
Mexico Argentina Bangladesh Brazil
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Figure 5. Handset Taxation Approaches by Country
Continent Sector discrimination Sector discrimination Sector discrimination Handset revenue based on moderate based on high import based on high VAT and maximization import duty duty import duty but low handset specific tax Africa Angola, Egypt, Ethiopia, Cameroon, Chad, DR Botswana, Burkina Fasso, Ghana, Nigeria, Lesotho Gabon, Guinea-Bissau, Congo, Gambia, Guinea, #OTE D)VOIRE -ADAGASCAR Kenya, Mauritania, Malawi, rep. Congo, Mozambique, Senegal, Mauritius, Morocco, Rwanda Tunisia Seychelles, S. Leone, S. Africa, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe Middle East Jordan Turkey, Yemen Syria Asia Pacific Cambodia, Lao, Malaysia, Bhutan, China, Indonesia, India, Nepal Bangladesh Myanmar, P. N. Guinea, Samoa, Sri Lanka Pakistan, Philippines, Thailand, Thailand, Vietnam Latin America Bolivia, Chile, Colombia, Argentina, Trinidad & Brazil D. Republic, Ecuador, Tobago, Venezuela Guatemala, Nicaragua, Paraguay, Perú, México Eastern Europe Albania, Kazakhstan, Azerbaijan, Georgia Russia, Ukraine, Uzbekistan Western Europe Austria, Bulgaria, Cyprus, Greece Czech Rep., Denmark, Estonia, France, Finland, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK
13 The Impact of Taxation on the Development of the Mobile Broadband Sector
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Figure 6. Combined taxation approaches
Service taxation Universalization Direct taxation Direct taxation and Service tax of service without sector sector specific taxes revenue discrimination maximization
Sector discrimination based on moderate import duty and telecom Malaysia South Africa Mexico Tanzania tax Sector discrimination China based on high import duty but no telecom tax Argentina Venezuela
Sector discrimination Yemen based on high VAT and import duty but low Turkey Handset taxation handset specific tax
Handset tax revenue Brazil Bangladesh maximization
Universalization and Protectionism Sector distortion Tax maximization and sector distortion protectionism
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14 The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 7. Combined Taxation Approach by Country
Continent Universalization and Protectionism Sector distortion Tax maximization and protectionism sector distortion Africa Angola, Botswana, Lesotho, Cameroon, Chad, Cote Kenya, Tanzania, Uganda, Burkina Faso, Ghana, S. Leone, Swaziland D)VOIRE $2 #ONGO %GYPT Zambia Madagascar, Nigeria, Ethiopia, Gabon, Gambia, Senegal, Tunisia Guinea, Guinea-Bissau, Madagascar, Mauritania, Mauritius, Morocco, Mozambique, Rwanda, Seychelles, S. Africa, Zimbabwe Middle East Syria, Yemen Jordan Iran, Turkey Asia Pacific Bhutan, China, , Indonesia, India, Philippines, Samoa Cambodia Bangladesh, Nepal, Lao, Malaysia, Myanmar, Pakistan, Sri Lanka P. New Guinea, Thailand, Vietnam Latin America Paraguay Bolivia, Chile, Guatemala, Dominican Rep., Ecuador, Argentina, Brazil, Venezuela Nicaragua, Perú, Trinidad & Mexico, Colombia Tobago Eastern Europe Azerbaijan, Georgia, Albania , Ukraine Kazakhstan, Russia, Uzbekistan Western Europe Austria, Bulgaria, Cyprus, Greece Czech Rep., Denmark, Estonia, France, Finland, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, UK
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15 The Impact of Taxation on the Development of the Mobile Broadband Sector
3. Cross-Sectional Analysis Of Taxation Impact On Mobile Broadband
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38% Continent/Country Population 28.6 Penetration 0% Western Europe 25.0 %
razil North America 28.0 % Africa B Malaysia Mexico South Bangladesh Asia 6.0 % Latin America 5.5 % Pre pay Post Paid Africa and Middle East 1.0 % Mexico 7.05 % Sources: ITU; Wireless Intelligence; Merrill Lynch; World Bank; TAS analysis Malaysia 4.78 % :KHQUHODWHGWRWKHOHYHORIHFRQRPLFGHYHORSPHQW Brazil 5.20 % %DQJODGHVK %UD]LO DQG 0H[LFR KDYH D ZLUHOHVV South Africa 0.80 % %#3#+'/+,(3$ 5/88,38$ +"#$ ),<#$ (*$ +"#,'$ #1(3(0.$ @)##$ Bangladesh 0.03 % )LJXUH Sources: ITU; Euromonitor; World Bank; TAS analysis
Figure 9. Mobile Subscribers and Economic Development &RJQL]DQW RI WKLV ZLGH GLVSDULW\ WKH JRYHUQPHQWV within Emerging Countries (2009) LQ DOO ÀYH FRXQWULHV VWXGLHG DUH LQ WKH FRXUVH RI ,0%5#0#3+,38$ %&65,1$ %(5,1,#)$ /,0#-$ /+$ )+,0&5/+,38$ 150% EURDGEDQG GHSOR\PHQW DQG DGRSWLRQ ,Q 0DOD\VLD Malaysia WKH FRXQWU\ ZLWK WKH PRVW DJJUHVVLYH SURJUDP WKH 113% S. Africa JRYHUQPHQWREMHFWLYHLVWRUHDFKSHQHWUDWLRQE\
ation (%) WKHHQGRI:LUHOHVVEURDGEDQGLVWKHWHFKQRORJ\ r 75% Brazil Mexico RIFKRLFHWRDFKLHYHWKLVWDUJHW)RUWKLVSXUSRVHWKH JRYHUQPHQWKDVLVVXHGQHZVSHFWUXPOLFHQVHVWRIRXU FRPSDQLHVWKDWZLOOUROORXWQHZZLUHOHVVEURDGEDQG 38% Bangladesh
Wireless penet VHUYLFHV EDVHG RQ :LPD[ SODWIRUPV )XUWKHUPRUH WR UDWLRQDOL]H FDSLWDO LQYHVWPHQW WKH JRYHUQPHQW 0% KDVLPSRVHGVKDULQJDJUHHPHQWVIRUWRZHUVDPRQJ 0 3750 7500 11250 15000 +6'3$DQG:LPD[RSHUDWRUV)LQDOO\DVDQLQFHQWLYH GDP per capita IRU RSHUDWRUV WR UROO RXW WKHLU EURDGEDQG QHWZRUNV (*) For emerging countries WKH JRYHUQPHQW DOVR DSSURYHG WD[ DOORZDQFHV RQ $ H[SHQGLWXUHVRQODVWPLOHEURDGEDQGHTXLSPHQW Sources: ITU; Wireless Intelligence; Merrill Lynch; World Bank; TAS analysis
16 The Impact of Taxation on the Development of the Mobile Broadband Sector
,Q 6RXWK $IULFD WKH EURDGEDQG SROLF\ LV OHVV Figure 11. Mobile data as a percentage of service revenues /88'#)),4#$ ,3$ +#'0)$ (*$ ,34#)+0#3+$ %'(0(+,(3$ +"/3$ (2003-9) LQ0DOD\VLD,QWKLVFDVHWKHJRYHUQPHQWKDVFUHDWHG 30% D VWDWHRZQHG EURDGEDQG FRPSDQ\ WR SURYLGH 6/1:"/&5$)#'4,1#)$+($5/)+$0,5#$)#'4,1#$%'(4,-#')7 23%
,Q 0H[LFR WKH JRYHUQPHQW DLPV WR DFKLHYH 15% EURDGEDQG SRSXODWLRQ SHQHWUDWLRQ E\ 7KH SULPDU\SROLF\YHKLFOHLVWKHSURPRWLRQRISODWIRUP 8% EDVHG FRPSHWLWLRQ ZKHUH H[SOLFLW DQG LPSOLFLW SROLFLHV KDYH EHQHÀWHG FDEOH SURYLGHUV ZKLOH UHVWULFWLQJ WKH À[HG OLQH LQFXPEHQW 7HOPH[ IURP 0% SURYLGLQJ WULSOH SOD\ ,Q DGGLWLRQ WKH JRYHUQPHQW KDV DXFWLRQHG QDWLRQDO ÀEHU RSWLF LQIUDVWUXFWXUH WR 4Q03 2Q04 4Q04 2Q05 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 FUHDWHDQDOWHUQDWLYHEDFNERQHGHDOLQJZLWKVSHFLÀF Mexico Malaysia Brazil S. Africa 0/':#+$6(++5#3#1:)7 $$ Source: Merrill Lynch; TAS analysis
,Q %UD]LO WKH JRYHUQPHQW LV FRQVLGHULQJ XQGHU WKH 1DWLRQDO %URDGEDQG 3ODQ D JHRJUDSKLFDOO\ Figure 12. 3G Phone subscribers as a percentage of all VHJPHQWHG DSSURDFK ,Q GHYHORSHG DUHDV LW LV subscribers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,Q %DQJODGHVK WKH JRYHUQPHQW DLPV WR SURYLGH Mexico Malaysia South Africa Brazil LQWHUQHWIDFLOLWLHVWRSHUFHQWRIWKHSRSXODWLRQDQG FRPPXQLW\EDVHGEURDGEDQGWRDOOYLOODJHVE\ $$ Source: BMI; TAS analysis ,Q RUGHU WR DFKLHYH WKLV WDUJHW VSHFWUXP OLFHQVHV ZHUHDXFWLRQHGWRRIIHUÀ[HG:L0D[VHUYLFHLQ ,Q WKLV FRQWH[W WD[DWLRQ RQ PRELOH VHUYLFHV DQG ZKLOH*OLFHQVHVZLOOEHSXWXSIRUELGLQ,Q -#4,1#)$1(&5-$"/4#$/$-#+',0#3+/5$#**#1+$(3$+"#$%&65,1$ SDUDOOHOWKHJRYHUQPHQWLVSURPRWLQJWKHVKDULQJRI %(5,1.$)+'/+#8.$/,0#-$/+$-#%5(.,38$6'(/-6/3-7$!",)$ LQIUDVWUXFWXUH EDFNERQH WRZHUV WR UHGXFH FDSLWDO LVSDUWLFXODUO\WKHFDVHRIIRXURIWKHÀYHFRXQWULHV -#%5(.0#3+$1()+)7 XQGHUVWXG\:LWKWKHH[FHSWLRQRI0DOD\VLDZKLFK "/)$,0%5#0#3+#-$/$6#3,83$+/2/+,(3$).)+#0$6/)#-$(3$ ,Q JHQHUDO WHUPV DOO ÀYH FRXQWULHV HQYLVLRQ PRELOH H[WUHPHO\ORZYDOXHDGGHGWD[WKHRWKHUFRXQWULHV 6'(/-6/3-$ /)$ /$ :#.$ 5#4#'$ +($ /--'#))$ +"#$ -,8,+/5$ "/4#$ ,3+'(-&1#-$ +/2#)$ +"/+$ 1(&5-$ 3#8/+,4#5.$ /**#1+$ LQFOXVLRQ JDS :LWK WKH H[FHSWLRQ RI %DQJODGHVK VHUYLFHGLIIXVLRQDVZRXOGEHWKHFDVHVRI%UD]LODQG ZKHUH * OLFHQVHV KDYH QRW EHHQ DXFWLRQHG \HW ² %DQJODGHVK VHH)LJXUH WKRXJK WKH SURFHVV LV H[SHFWHG WR EHJLQ VRRQ ² DOO FRXQWULHV UHJLVWHU D FRQWLQXRXV LQFUHDVH LQ ZLUHOHVV EURDGEDQGVHUYLFHVFRPELQHGZLWKWKHGHSOR\PHQW RI*HQDEOHGKDQGVHWVDQGGHYLFHV VHH)LJXUHV DQG
17 The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 13. Mobile Taxation approaches in the five countries under study
Services Handset Country VAT Other Fixed Customs Other Fixed Taxation Approach VAT Taxes Taxes Duty Taxes Taxes Malaysia 5% ------10% ------Universalization and protectionism South Africa 14% ------14% 7.60% ------Protectionism
Mexico 16% 3% (*) - - - 16% 0.10% ------Sector distortion Brazil 33% 5.1% - - - 33% 19% 9.30% $13.35 Tax maximization and Bangladesh 15% 35% $11.76 15% 12% - - - $11.63 sector distortion
(*) Applies to all telecommunications services except for fixed and mobile broadband Source: Deloitte (2008); updated by TAS
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Figure 14. Taxation vs. Adoption of Data Services
50%
38% Malaysia Mexico 25% Brazil
13%
South Africa
Wireless data as % of service revenues 0% 0 15.0 30.0 45.0 60.0 Overall Taxes
Source: Deloitte (2008); Merrill Lynch; TAS analysis
18 10 In the case of mobile broadband in Mexico the impact of taxes on total cost of ownership is 16.1% since some levies do not apply The Impact of Taxation on the Development of the Mobile Broadband Sector
4. Case Studies On Mobile Broadband Taxation
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Sources: Deloitte (2008); updated by TAS 19 The Impact of Taxation on the Development of the Mobile Broadband Sector
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Figure 18. 3G Penetration Vs. Handset Taxes Figure 19. Overall Total Cost of Ownership of Mobile 20.0% Services in Developing Countries 60.0 15.0% ation r Brazil Malaysia 45.0 TCMO 10.0%
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Sources: Deloitte (2008); updated by TAS Sources: Merrill Lynch; Deloitte (2008) updated by TAS; TAS analysis
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20 11 .OTE CALCULATION IS THE FOLLOWING OR The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 20. 3G Penetration Vs. Handset Taxes Figure 21. Overall Total Cost of Mobile Ownership in Developing Countries 20.0% 60.0 Bangladesh 15.0% ation r 45.0 TCMO 10.0% 30.0 5.0%
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Sources: Merrill Lynch; Deloitte (2009) updated by TAS; TAS analysis (*) Note: estimated Sources: Deloitte (2008); updated by TAS !#5#1(00&3,1/+,(3)$ +/2/+,(3$ "/)$ 6##3$ %/'+$ (*$ +"#$ 3/+,(3/5$ -#6/+#$ ),31#$ +"#$ %',4/+,
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Figure 23. Overall Total Cost of Ownership of Mobile Services
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Sources: Merrill Lynch; Deloitte (2009) updated by TAS; TAS analysis $
22 The Impact of Taxation on the Development of the Mobile Broadband Sector
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12 Until the economic crisis, average replacement cycle for handsets was 18 months. This has been found to increase since then. 23 The Impact of Taxation on the Development of the Mobile Broadband Sector
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24 13 Results included in appendix E. The Impact of Taxation on the Development of the Mobile Broadband Sector
93$ /--,+,(3$ +($ 0#/)&',38$ ,0%/1+$ (3$ #1(3(0,1$ Figure 25. OECD: Percentage of Impact of Broadband on JURZWKVHYHUDOVWXGLHVKDYHDOVRHVWLPDWHGWKHHIIHFW GDP Growth (*$6'(/-6/3-$-#%5(.0#3+$(3$#0%5(.0#3+$1'#/+,(37$ High penetration Denmark, ;.$ '#5.,38$ (3$ '#8,(3/5$ -,)/88'#8/+#-$ -/+/$ *('$ Norway, Netherlands, &KLOHEHWZHHQWKH\HDUVDQG .DW] Sweden, Switzerland Medium IRXQGWKDWZKHQFRQWUROOLQJIRUUHJLRQDOHFRQRPLF Average penetration contribution to 0.0250 Germany, France, GDP growth: 0.0050 GLIIHUHQFHVDQLQFUHDVHLQEURDGEDQGSHQHWUDWLRQRI Japan, Belgium, 0.023 UK, Australia, US, Low \LHOGVDQLQFUHDVHLQLQWKHRFFXSDWLRQUDWH penetration Canada, 0.0043 Greece, Luxemburg 6LPLODUO\/HKU HW DO DQDO\]HG 86 OHYHO GDWD 0.0200 Portugal, Italy, Average New Zealand, contribution to -,)/88'#8/+#-$/+$+"#$%()+/5$1(-#$5#4#5$/3-$*(&3-$+"/+$ Austria, GDP growth: 0.0036 Hungary, Spain, 0.014 6'(/-6/3-$/4/,5/6,5,+.$/+$/$1(00&3,+.$5#4#5$/--#-$ 0.0150 Ireland Average 0.0029 contribution to RYHUWRHPSOR\PHQWJURZWK6KLGHOHUHWDO GDP growth: 0.008 0.0021 age impact on growth
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25 The Impact of Taxation on the Development of the Mobile Broadband Sector
QHHG WR EH FUHDWHG E\ WKRVH WD[ GROODUV WKDW ZHUH Figure 27: Impact on tax revenue (negative numbers IRUHJRQHE\ORZHULQJWKHWD[UDWHLIWKH\ZHUHWREH represent foregone taxes) (in US$ million) VSHQWE\WKHJRYHUQPHQWHLWKHUDVFXUUHQWVSHQGLQJ LQYHVWPHQWRUZHDOWKUHGLVWULEXWLRQ,WUHSUHVHQWVWKH GDP Elasticity UHWXUQUHTXLUHGIRUDQHXWUDOZHDOWKFUHDWLRQVFHQDULR 0.17 % 0.60 % 1.38 % ,Q VHYHUDO FDVHV DV UHGXFLQJ WD[HV WUDQVODWHV LQWR Penetration 0.6 $ (35) $ (42) $ 20 KLJKHU WD[ UHYHQXH WKLV QXPEHU EHFRPHV QHJDWLYH elasticity 1.2 $ 5 $ 31 $ 155 :KLOH LW PLJKW EH FRXQWHULQWXLWLYH ORZHU WD[HV RQ PRELOHEURDGEDQGVHUYLFHVPHDQVWKDWWKHJURZWKRQ
#2+#'3/5,+,#)$0('#$+"/3$1(0%#3)/+#)$*('$+"#$-#1'#/)#$ ,3$+"#$+/2$'/+#7 Figure 28: Accumulated return required on each tax dollar for wealth creation neutrality !"#$5/)+$+"'##$+/65#)$,3$#/1"$1/)#$1(''#)%(3-$+($+"#$ #)+,0/+#$(*$#**#1+)$,3$+"#$".%(+"#+,1/5$1/)#$(*$'#-&1,38$ GDP Elasticity WD[HVWRWKHOHYHOFXUUHQWO\DSSOLHGLQ0DOD\VLD 0.17 % 0.60 % 1.38 % RQ7&2 (YHQWKRXJKLWLVDGUDVWLFVFHQDULRFRPSDUHG Penetration 0.6 $ 6.7 $ 5.9 $ 13.6 WR FXUUHQW OHYHOV DSSOLHG LQ 0H[LFR 6RXWK $IULFD elasticity 1.2 $ 12.1 $ 16.4 $ 37.7 %UD]LODQG%DQJODGHVKWKHUHVXOWVGHPRQVWUDWHWKH PDJQLWXGH RI WKH HIIHFW WKDW D PRUH EHQHÀFLDO WD[ 0H[LFR KDV \HDU DIWHU \HDU SURYHQ WR EH DQ V\VWHPZRXOGKDYHRQWKHHFRQRP\7KLVLVSUREDEO\ LQHIÀFLHQWWD[FROOHFWRU2YHUDOOWD[HVUHSUHVHQW RQH RI WKH UHDVRQV ZK\ FRXQWULHV VXFK DV 0DOD\VLD RI *'3 ZKLFK LV ORZ E\ LQWHUQDWLRQDO VWDQGDUGV KDYH PDQDJHG WR FRQVLVWHQWO\ RXWSHUIRUP LQ WKLV 1HYHUWKHOHVV WKLV QXPEHU KLGHV WKH IDFW WKDW WKH DQG RWKHU LQGLFHV WKH GHYHORSPHQW RI RWKHU ODUJH 0H[LFDQ JRYHUQPHQW VWLOO GHSHQGV KHDYLO\ RQ RLO -#4#5(%,38$#1(3(0,#)7 UHODWHG WD[HV 1RQRLO WD[HV ² LQFRPH 9$7 DQG RWKHUV²UHSUHVHQWRQO\ RI*'3 :RUOG+HULWDJH 5.3.1. Mexico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igure 26: Accumulated additional GDP (in US$ billion) FRPSDUHGWRWKHFXUUHQWOHYHO VHH)LJXUH
GDP Elasticity Figure 29: Accumulated additional GDP (in US$ billion): 0.17 % 0.60 % 1.38 % From 16.1% to 6.1% Penetration 0.6 $ 0.6 $ 0.5 $ 1.2 elasticity 1.2 $ 0.8 $ 1.0 $ 2.4 GDP Elasticity 0.17 % 0.60 % 1.38 %
Penetration 0.6 $ 5.9 $ 5.6 $ 12.9 elasticity $ 1.2 $ 7.8 $ 12.1 $ 27.9
26 The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 30: Impact on tax revenue: From 16.1% to 6.1% Figure 34: Accumulated return required on each tax dollar (negative numbers represent foregone taxes) (in US$ for wealth creation neutrality million) GDP Elasticity GDP Elasticity 0.17 % 0.60 % 1.38 % 0.17 % 0.60 % 1.38 % Penetration 0.6 $ 1.7 $ 4.9 $ 11.3 Penetration 0.6 $ (384) $ (414) $ 242 elasticity 1.2 $ 2.5 $ 11.1 $ 25.6 elasticity 1.2 $ (111) $ (280) $ 1,701 5.3.3. Brazil Figure 31: Accumulated return required on each tax dollar 1RWRQO\KDV%UD]LORQHRIWKHKLJKHVWWD[UDWHVLQWKH for wealth creation neutrality: From 16.1% to 6.1% ZRUOGEXWDOVRRQHRIWKHPRVWFRPSOH[VWUXFWXUHV &XUUHQWWD[HVRQ7&2DUHZLWKRXWFRQVLGHULQJ (+"#'$5#4,#)$@&3,4#')/5$)#'4,1#$*&3-$/3-$-#4#5(%0#3+$ GDP Elasticity IXQGFRQWULEXWLRQ ,WZRXOGWKHQEHH[SHFWHGWKDWWKH 0.17 % 0.60 % 1.38 % LPSDFWRIVPDOOUHGXFWLRQVRQWKHWRWDOWD[UDWHZRXOG Penetration 0.6 $ 6.5 $ 6.1 $ 14.0 EH VLJQLÀFDQW WKLV LV FRQÀUPHG E\ WKH HFRQRPLF elasticity 1.2 $ 9.6 $ 15.0 $ 34.5 LPSDFW PRGHO 3HQHWUDWLRQ ZRXOG EH SS KLJKHU HTXLYDOHQW WR DGGLWLRQDO 5.3.2. Malaysia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igure 35: Accumulated additional GDP (in US$ billion) 0H[LFRFDVHORZHUWD[UDWHVPRVWOLNHO\LPSO\KLJKHU WD[UHYHQXHV VHH)LJXUH GDP Elasticity 0.17 % 0.60 % 1.38 % Figure 32: Accumulated additional GDP (in US$ million) Penetration 0.6 $ 0.7 $ 0.5 $ 1.7 elasticity 1.2 $ 0.9 $ 1.5 $ 3.4 GDP Elasticity 0.17 % 0.60 % 1.38 % Figure 36: Impact on tax revenue (negative numbers Penetration 0.6 $ 105 $ 310 $ 712 represent foregone taxes) (in US$ million) elasticity 1.2 $ 138 $ 624 $ 1,437
GDP Elasticity Figure 33: Impact on tax revenue (negative numbers 0.17 % 0.60 % 1.38 % represent foregone taxes) (in US$ million) Penetration 0.6 $ 115 $ 117 $ 485 elasticity 1.2 $ 329 $ 532 $ 1,272 GDP Elasticity 0.17 % 0.60 % 1.38 % Penetration 0.6 $ (48) $ (17) $ 42 elasticity 1.2 $ (36) $ 36 $ 156
27 The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 37: Accumulated return required on each tax dollar 5.3.4. Bangladesh for wealth creation neutrality 0RELOH EURDGEDQG VHUYLFHV KDYH QRW \HW EHHQ ODXQFKHGLQ%DQJODGHVKDWWKHWLPHWKLVUHSRUWZDV GDP Elasticity ZULWWHQ+HQFHHVWLPDWLQJWKHLPSDFWRIORZHUWD[HV 0.17 % 0.60 % 1.38 % LVGLIÀFXOW WKHUHVXOWVDUHWKXVRQO\GLUHFWLRQDO2XU PRGHOHVWLPDWHVWKHLPSDFWRYHUDÀYH\HDUSHULRG Penetration 0.6 $ 4.4 $ 4.4 $ 10.1 EHJLQQLQJDWWKHODXQFKRI*VHUYLFHVDWDQ\SRLQW elasticity 1.2 $ 25.6 $ 39.7 $ 91.4 LQ WLPH LQ WKH IXWXUH DVVXPLQJ PDFURHFRQRPLF LQGLFDWRUV DW WKH FXUUHQW OHYHO :H EHOLHYH WKHVH ,WLVXQOLNHO\WKDWWKH%UD]LOLDQJRYHUQPHQWEHZLOOLQJWR LQGLFDWRUV ZLOO EH EHWWHU DV RI WKH ODXQFK WLPH LQ DGRSWDEHQHÀFLDOWD[UDWHWRWHOHFRPPXQLFDWLRQVVLPLODU WKDWFDVHWKHHVWLPDWHGLPSDFWRIEURDGEDQGLQWKH WRWKDWRI0DOD\VLD,WLVLOOXVWUDWLYHWKRXJKJLYHQWKH HFRQRP\ ZLOO EH KLJKHU 3HQHWUDWLRQ RI * VHUYLFHV VL]HRIWKHHFRQRP\DQGWKHFXUUHQWWD[UDWHDSSOLHG ZDV DVVXPHG WR LQFUHDVH DW UDWHV VLPLODU WR RWKHU WRVHHZKDWWKHLPSDFWRIVXFKDPHDVXUHZRXOGEHLQ -#4#5(%,38$#1(3(0,#)7 WKHHFRQRP\DVDZKROH:HDOWKFUHDWLRQZRXOGEHD QRQQHJOLJLEOHDPRXQWRIDQ\ZKHUHIURPWR $IWHUDÀYH\HDUSHULRGDPDUJLQDOUHGXFWLRQRIWKH ELOOLRQRYHU\HDUVDQDPRXQWHTXLYDOHQWWRPRUHWKDQ WD[UDWHRQ7&2IURPWRZRXOGLQFUHDVH SHUSHUVRQSHU\HDU VHH)LJXUH ,QDOOFDVHVWD[ SHQHWUDWLRQSHUFHQWDJHSRLQWV7KHVXEVFULEHU FROOHFWLRQVZRXOGLQFUHDVH$VWKHUHWXUQVRQVXFKDQ EDVHZRXOGEH KLJKHUHTXLYDOHQWWR DFWLRQDUHVRVLJQLÀFDQW²XSWRIRUHDFKIRUHJRQH DGGLWLRQDOVXEVFULEHUV2YHUDOODFFXPXODWHG WD[GROODU²LWLVKDUGWREHOLHYHWKDWDQ\PDUJLQDODFWLRQ LPSDFWRQ*'3LVORZUHÁHFWLQJWKHLQLWLDOVWDJHVRI 1&''#3+5.$&3-#'+/:#3$6.$;'/<,5$+($)%#3-$+",)$+/2$,31(0#$ 6'(/-6/3-$/3-$+"#$),<#$(*$+"#$#1(3(0.$(*$;/385/-#)"7$ ZLOOEHDEOHWRSURGXFHPRUHZHDOWKWRWKHHFRQRP\ !"#$0()+$1(3)#'4/+,4#$#)+,0/+#$'#3-#')$/$%(),+,4#$(*$ LPSDFWRI86PLOOLRQEXWLWFRXOGEHDVKLJKDV Figure 38: Accumulated additional GDP (in US$ billion): 86 PLOOLRQ VHH )LJXUH 7KH FRQVHUYDWLYH From 43.3% to 6.1% HVWLPDWHVLQGLFDWHWKDWWKHUHZRXOGEHDQHWORVVLQ WD[UHYHQXHVRPHZKHUHDURXQG86PLOOLRQ VHH GDP Elasticity )LJXUH EXWWKHPRUHDJJUHVVLYHVFHQDULRVLQGLFDWH 0.17 % 0.60 % 1.38 % WKDWWRWDOWD[UHYHQXHVZRXOGDFWXDOO\EHKLJKHUWKDQ ZLWKWKHFXUUHQWOHYHORIWD[HV Penetration 0.6 $ 27.3 $ 34.7 $ 80.2 elasticity 1.2 $ 35.5 $ 178.2 $ 205.5 2YHUDOOUHWXUQRIWKHVHIRUHJRQHWD[GROODUVLVKLJK 6&+$0&1"$)0/55#'$+"/3$,3$+"#$'#)+$(*$+"#$1/)#)$)+&-,#-$ Figure 39: Impact on tax revenue: From 43.3% to 6.1% (3$+",)$'#%('+7$!",)$,)$#2%5/,3#-$6.$+"#$)0/55$),<#$(*$ (negative numbers represent foregone taxes) (in US$ 0(6,5#$ 6'(/-6/3-$ ,3$ ,+)$ #/'5.$ )+/8#)7$ !"#)#$ #**#1+)$ billion) ZRXOGJURZLQDFXPXODWLYHPDQQHUWKURXJKWLPH )($ #4#3$ )0/55$ -,**#'#31#)$ ,3$ %#3#+'/+,(3$ /3-$ +"#$ GDP Elasticity DGRSWLRQUDWHVFDXVHGE\WD[DWLRQZLOOKDYHDODUJH DQGHQGXULQJHIIHFWRQZHDOWKLQWKHPHGLXPWHUP 0.17 % 0.60 % 1.38 % Penetration 0.6 $ 2.9 $ 5.8 $ 23.4 elasticity 1.2 $ 7.1 $ 27.6 $ 73.1 Figure 41: Accumulated additional GDP (in US$ million)
GDP Elasticity Figure 40: Accumulated return required on each tax dollar for wealth creation neutrality: From 43.3% to 6.1% 0.17 % 0.60 % 1.38 % Penetration 0.6 .!14 $ 11.4 $ 26.2 elasticity GDP Elasticity 1.2 .! $ 22.9 $ 52.8 0.17 % 0.60 % 1.38 % Penetration 0.6 $ 3.6 $ 4.5 $ 10.5 elasticity 1.2 $ 5.3 $ 13.2 $ 30.8
14 The methodology used to estimate the impact on GDP of broadband developed for this study assumes the existence of a customer base of reasonable 28 size. Growth in the initial stages (sometimes well above 500%) falls beyond the range for which the parameter we estimated has any applicability. The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 42: Impact on tax revenue (negative numbers Figure 46: Accumulated return required on each tax dollar represent foregone taxes) (in US$ million) for wealth creation neutrality: From 54.8% to 6.1%
GDP Elasticity GDP Elasticity 0.17 % 0.60 % 1.38 % 0.17 % 0.60 % 1.38 % Penetration 0.6 .! $ (21.1) $ (19.9) Penetration 0.6 .$ $ 0.6 $ 1.4 elasticity 1.2 .! $ 2.4 $ 4.9 elasticity 1.2 .$ $ 2.0 $ 4.6
$VRYHUDOOLPSDFWLVSRVLWLYH%DQJODGHVKDXWKRULWLHV Figure 43: Accumulated return required on each tax dollar for wealth creation neutrality (&8"+$ +($ 1(3),-#'$ '/+,(3/5,<,38$ +"#$ )+'&1+&'#$ /3-$ 5#4#5)$ (*$ +/2/+,(3$ (3$ 0(6,5#$ 6'(/-6/3-$ ,3$ ('-#'$ +($ ERRVW WKH DGRSWLRQ RI WKHVH VHUYLFHV ,W ZRXOG KHOS GDP Elasticity 15()#$ +"#$ 8/%$ 1/&)#-$ 6.$ +"#$ 5/+#$ 5/&31"$ (*$ +"#)#$ 0.17 % 0.60 % 1.38 % )#'4,1#)7$ 9+$ ,)$ '/%,-5.$ */55,38$ 6#",3-$ +"#$ '#)+$ (*$ +"#$ Penetration 0.6 .! $ 0.5 $ 1.2 ZRUOGLQWKLVGLPHQVLRQ VSHFLDODFWLRQVZRXOGQHHG elasticity 1.2 .! $ (negative)15 $ (negative) +($6#$+/:#3$,3$('-#'$+($'#1(4#'$5()+$+,0#7
!"#$ ".%(+"#+,1/5$ )1#3/',($ (*$ /))&0,38$ +/2#)$ 1(&5-$ 5.3.5. South Africa EHORZHUHGWRWKHOHYHOSUDFWLFHGLQ0DOD\VLDVKRZD ,QPRELOHEURDGEDQGWHUPV6RXWK$IULFDLVUHDVRQDEO\ PXFKODUJHULPSDFW7KH*'3HIIHFWRYHUDÀYH\HDU DGYDQFHG ZLWK D SHQHWUDWLRQ RI DERXW ,WV WD[ SHULRGFRXOGUHDFK86 ELOOLRQZKLFKLVDERXW VWUXFWXUHZKLFKIRUVHUYLFHVDSSOLHVRQO\DVWDQGDUG RIFXUUHQW*'3 VHH)LJXUH 7KLVZRXOGFRPHDWD 9$7UDWHLVFRQGXFLYHWRJURZWKLQV\QFKURQ\ZLWK FRVWWRWKHWUHDVXU\RI86²86ELOOLRQLQ WKH HFRQRP\ 1HYHUWKHOHVV WD[ LQFHQWLYHV FRXOG +"#$*('0$(*$*('#8(3#$'#4#3&#)7$!"#$#2%#1+#-$'#+&'3)$ KHOSIRVWHUDFFHOHUDWHGJURZWK$SSUHGXFWLRQRQ RQ WKHVH IRUHJRQH UHYHQXHV WKRXJK UHDVRQDEOH 7&2IURPWKHFXUUHQW WR FRXOGLQFUHDVH UDQJHRQO\IURPWR VHH)LJXUH SHQHWUDWLRQDIWHUÀYH\HDUVE\WRSSLPSO\LQJ WR DGGLWLRQDO VXEVFULEHUV 7KH HIIHFW RQ *'3 ZRXOG EH DQ\ZKHUH IURP 86 PLOOLRQ WR Figure 44: Accumulated additional GDP: From 54.8% to 86ELOOLRQ VHH)LJXUH 2QWKHFRQVHUYDWLYH 6.1% (in US$ million) VLGH WKLV ZRXOG FRPH DW D FRVW WR WKH WUHDVXU\ LQ IRUHJRQH WD[HV RI DERXW 86 PLOOLRQ EXW FRXOG GDP Elasticity %(+#3+,/55.$%'(-&1#$/--,+,(3/5$+/2$'#4#3&#$(*$/'(&3-$ 0.17 % 0.60 % 1.38 % 86PLOOLRQ VHH)LJXUH 7KXVWKHUHWXUQRQ Penetration 0.6 .$ $ 0.8 $ 1.8 WKHIRUHJRQHUHYHQXHZRXOGEHVLJQLÀFDQWUDQJLQJ elasticity 1.2 .$ $ 2.1 $ 4.9 IURP WRDOPRVW VHH)LJXUH
Figure 45: Impact on tax revenue: From 54.8% to 6.1% Figure 47: Accumulated additional GDP (in US$ million) (negative numbers represent foregone taxes) (in US$ million) GDP Elasticity 0.17 % 0.60 % 1.38 % GDP Elasticity Penetration 0.6 $ 138 $ 289 $ 666 0.17 % 0.60 % 1.38 % elasticity 1.2 $ 180 $ 583 $ 1,342 Penetration 0.6 .$ $ (1,220) $ (1,130) elasticity 1.2 .$ $ (870) $ (640)
15 The “accumulated return” is negative because applying a tax of 53.8% to mobile broadband services allows the government to directly collect more taxes than applying a tax rate of 54.8%. This is a typical example of higher tax rates decreasing tax collection, without the consideration of the overall impact on the economy. 29 The Impact of Taxation on the Development of the Mobile Broadband Sector
Figure 48: Impact on tax revenue (negative numbers Figure 52: Accumulated return required on each tax dollar represent foregone taxes) (in US$ million) for wealth creation neutrality: From 14.9% to 6.1%
GDP Elasticity GDP Elasticity 0.17 % 0.60 % 1.38 % 0.17 % 0.60 % 1.38 % Penetration 0.6 $ (37) $ 3 $ 103 Penetration 0.6 $ 1.8 $ 4.1 $ 9.3 elasticity 1.2 $ (6) $ 101 $ 303 elasticity 1.2 $ 2.7 $ 9.9 $ 22.9
Figure 49: Accumulated return required on each tax dollar for wealth creation neutrality
GDP Elasticity 0.17 % 0.60 % 1.38 % Penetration 0.6 $ 1.9 $ 3.9 $ 9.0 elasticity 1.2 $ 3.4 $ 10.8 $ 24.9
$VVXPLQJ D 0DOD\VLDQ WD[ VWUXFWXUH VKRZV WKH #3('0(&)$ #**#1+)$ (*$ 6'(/-6/3-$ (3$ +"#$ #1(3(0.7$ $GGLWLRQDO ZHDOWK FUHDWLRQ DIWHU ÀYH \HDUV UDQJHV IURP D FRQVHUYDWLYH 86 ELOOLRQ WR D PRUH DJJUHVVLYH86ELOOLRQZHUHWKHHVWLPDWHVRIWKH :RUOG%DQNXVHGWRHVWLPDWHWKHLPSDFW VHH)LJXUH 7KLVFRXOGFRPHDWDFRVWWRWKHWUHDVXU\RIDERXW 86 PLOOLRQ EXW FRXOG SRWHQWLDOO\ ERRVW WD[ FROOHFWLRQE\86 ELOOLRQ VHH)LJXUH
Figure 50: Accumulated additional GDP: From 14.9% to 6.1% (in US$ billion)
GDP Elasticity 0.17 % 0.60 % 1.38 % Penetration 0.6 $ 1.2 $ 2.7 $ 6.3 elasticity 1.2 $ 1.6 $ 5.8 $ 13.4
Figure 51: Impact on tax revenue: From 14.9% to 6.1% (negative numbers represent foregone taxes) (in US$ million)
GDP Elasticity 0.17 % 0.60 % 1.38 % Penetration 0.6 $ (347) $ 52 $ 994 elasticity 1.2 $ (164) $ 960 $ 2,987
30 The Impact of Taxation on the Development of the Mobile Broadband Sector
6. Policy Implications
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Figure 53. Increase in Wireless Penetration Resulting from Changes in Taxation (in percentage points)
30.0 300.0
25.0 24.0 250.0
20.0 200.0
15.0 150.0 11.4 10.0 9.0 100.0
4.6 5.0 50.0 1.3 0.4 0.4 0.1 0.9 0 0 Mexico Brazil Bangladesh South Africa Malaysia Mexico Brazil BangladeshSouth Africa Malaysia
Reduction of 1 p.p. Reduction to benchmark rate
31 The Impact of Taxation on the Development of the Mobile Broadband Sector
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Figure 54. List of Countries whose taxation policies might impact the diffusion of mobile broadband
Sector distortion Tax maximization and sector distortion
Africa Kenya, Tanzania, Uganda, Zambia Burkina Faso, Ghana, Madagascar, Nigeria, Senegal, Tunisia Middle East Jordan Iran, Turkey Asia Pacific Cambodia Bangladesh, Nepal, Pakistan, Sri Lanka Latin America Dominican Rep., Ecuador, Mexico, Argentina, Brazil, Venezuela Colombia Eastern Europe Albania , Ukraine Western Europe Greece
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32 16 Examples of sources are Economist Intelligence Unit, Business Environment Risk Intelligence, WEF, World Bank The Impact of Taxation on the Development of the Mobile Broadband Sector
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The Impact of Taxation on the Development of the Mobile Broadband Sector
Appendices
A. Study team
B. Database of taxation approaches
C. Case studies
D. Economic impact of broadband
E. Economic impact model assumptions
F. Bibliography
35 The Impact of Taxation on the Development of the Mobile Broadband Sector
A. Study Team
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Database of taxation approaches 1. Taxes on Services VAT or Other Fixed taxes similar VAT Specific Fixed Matrix 1 Concatenate Group Taxes (US$) taxes (1) (2) (3) (4) (5) (6) (7) (8) (9) AFRICA Angola 5.0% 1 0 0 10 100 Grupo 1 Botswana 10.00% 1 0 0 10 100 Grupo 1 Burkina Faso 18.00% 0.04-0.10 2 0 2 20 202 Grupo 3 Cameroon 19.25% 2 0 0 20 200 Grupo 2 Chad 18.00% 2 0 0 20 200 Grupo 2 #OTE D)VOIRE 18.00% 2 0 0 20 200 Grupo 2 DRCongo 18.00% 2 0 0 20 200 Grupo 2 Egypt 15.00% 2 0 0 20 200 Grupo 2 Ethiopia 15.00% 2 0 0 20 200 Grupo 2 Gabon 18.00% 2 0 0 20 200 Grupo 2 Gambia 18.00% 2 0 0 20 200 Grupo 2 Ghana 12.50% 2.50% 2 1 0 21 210 Grupo 3 Guinea 18.00% 2 0 0 20 200 Grupo 2 Guinea-Bissau 15.00% 2 0 0 20 200 Grupo 2 Kenya 16.00% 10.00% 2 2 0 22 220 Grupo 4 Lesotho 5.00% 1 0 0 10 100 Grupo 1 Madagascar 18.00% 8.00% 2 2 0 22 220 Grupo 4 Mauritania 14.00% 2 0 0 20 200 Grupo 2 Mauritius 15.00% 2 0 0 20 200 Grupo 2 Morocco 20.00% 2 0 0 20 200 Grupo 2 Mozambique 17.00% 2 0 0 20 200 Grupo 2 Nigeria 5.00% 8.00% 1 2 0 12 120 Grupo 3 Rwanda 18.00% 2 0 0 20 200 Grupo 2 Senegal 18.00% 7.18 2 0 2 20 202 Grupo 4 Seychelles 17.60% 2 0 0 20 200 Grupo 2 Sierra Leone 10.00% 1 0 0 10 100 Grupo 1 South Africa 14.00% 2 0 0 20 200 Grupo 2 Swaziland 0 0 0 00 000 Grupo 1 Tanzania 20.00% 7.00% 2 2 0 22 220 Grupo 4 Tunisia 18.00% 5.00% 2 1 0 21 210 Grupo 3 Uganda 18.00% 12.00% 2 2 0 22 220 Grupo 4 Zambia 17.50% 10.00% 2 2 0 22 220 Grupo 4 Zimbabwe 15.00% 2 0 0 20 200 Grupo 2 Note: Columns (4), (5) and (6) represent codes defined according to tax levels of columns (1), (2) and (3); columns (8) and (9) combine codes and determine the type of taxation approach by country: Group 1 (Universalization of Services); Group 2 (Direct taxation without sector discrimination); Group 3 (Direct taxation and sector specific taxes); Group 4 (Maximize tax revenues). 37 The Impact of Taxation on the Development of the Mobile Broadband Sector VAT or Other Fixed taxes similar VAT Specific Fixed Matrix 1 Concatenate Group Taxes (US$) taxes MIDDLE EAST Iran 6.00% 4.33 for pre- 1 0 2 10 102 Grupo 3 Jordan 16.00% 4.00% 2 1 0 21 210 Grupo 3 Syria 3.00% 1 0 0 10 100 Grupo 1 Turkey 18.00% 25.00% 23.86 2 2 2 22 222 Grupo 4 Yemen 10.00% 1 0 0 10 100 Grupo 1 ASIA PACIFIC Bangladesh 15.00% 35.00% 11.76 2 2 2 22 222 Grupo 4 Bhutan 0 0 0 00 000 Grupo 1 Cambodia 10.00% 3.00% 1 1 0 11 110 Grupo 3 China 3.00% 1 0 0 10 100 Grupo 1 India 12.24% 2 0 0 20 200 Grupo 2 Indonesia 10.00% 1 0 0 10 100 Grupo 1 Lao 10.00% 1 0 0 10 100 Grupo 1 Malaysia 5.00% 1 0 0 10 100 Grupo 1 Myanmar 0.00% 0 0 0 00 000 Grupo 1 Nepal 13.00% 10.00% 20.15 2 2 2 22 222 Grupo 4 Pakistan 15.00% 8.30 2 0 2 20 202 Grupo 4 Papua New Guinea 10.00% 1 0 0 10 100 Grupo 1 Philippines 12.00% 2 0 0 20 200 Grupo 2 Samoa 12.50% 2 0 0 20 200 Grupo 2 Sri Lanka 15.00% 2.50% 2 1 0 21 210 Grupo 3 Thailand 7.00% 1 0 0 10 100 Grupo 1 Vietnam 10.00% 1 0 0 10 100 Grupo 1 LATIN AMERICA Argentina 21.00% 4.00% 2 1 0 21 210 Grupo 3 Bolivia 13.00% 2 0 0 20 200 Grupo 2 Brazil 33.00% 3.00% 2 1 0 21 210 Grupo 3 Chile 19.00% 2 0 0 20 200 Grupo 2 Colombia 20.00% 2 0 0 20 200 Grupo 2 Dominican Republic 16.00% 12.00% 2 2 0 22 220 Grupo 4 Ecuador 12.00% 15.00% 2 2 0 22 220 Grupo 4 Guatemala 12.00% 2 0 0 20 200 Grupo 2 Mexico 16.00% 3.00% 2 1 0 21 210 Grupo 3 Nicaragua 15.00% 2 0 0 20 200 Grupo 2 Paraguay 10.00% 1 0 0 10 100 Grupo 1 Peru 19.00% 2 0 0 20 200 Grupo 2 Trinidad and Tobago 15.00% 2 0 0 20 200 Grupo 2 Venezuela 14.00% 1.56-6.25 2 0 2 20 202 Grupo 4 38 The Impact of Taxation on the Development of the Mobile Broadband Sector VAT or Other Fixed taxes similar VAT Specific Fixed Matrix 1 Concatenate Group Taxes (US$) taxes RUSSIA/CIS/CENTRAL AND EASTERN EUROPE Albania 20.00% Post pay 59 2 0 2 20 202 Grupo 4 Azerbaijan 18.00% 2 0 0 20 200 Grupo 2 Georgia 18.00% 2 0 0 20 200 Grupo 2 Kazakhstan 15.00% 2 0 0 20 200 Grupo 2 Russia 18.00% 2 0 0 20 200 Grupo 2 Ukraine 20.00% 7.50% 2 2 0 22 220 Grupo 4 Uzbekistan 20.00% 2 0 0 20 200 Grupo 2 WESTERN EUROPE Austria 20.00% 2 0 0 20 200 Grupo 1 Bulgaria 20.00% 2 0 0 20 200 Grupo 1 Cyprus 15.00% 2 0 0 20 200 Grupo 1 Czech Republic 19.00% 2 0 0 20 200 Grupo 1 Denmark 25.00% 2 0 0 20 200 Grupo 1 Estonia 18.00% 2 0 0 20 200 Grupo 1 France 19.60% 2 0 0 20 200 Grupo 1 Finland 22.00% 2 0 0 20 200 Grupo 1 Germany 16.00% 2 0 0 20 200 Grupo 1 Greece 19.00% 1.92-5.75 2 0 2 20 202 Grupo 4 Hungary 20.00% 2 0 0 20 200 Grupo 1 Ireland 21.00% 2 0 0 20 200 Grupo 1 Italy 20.00% 2 0 0 20 200 Grupo 1 Latvia 18.00% 2 0 0 20 200 Grupo 1 Lithuania 18.00% 2 0 0 20 200 Grupo 1 Luxembourg 15.00% 2 0 0 20 200 Grupo 1 Malta 18.00% 2 0 0 20 200 Grupo 1 Netherlands 19.00% 2 0 0 20 200 Grupo 1 Poland 22.00% 2 0 0 20 200 Grupo 1 Portugal 21.00% 2 0 0 20 200 Grupo 1 Romania 19.00% 2 0 0 20 200 Grupo 1 Slovakia 19.00% 2 0 0 20 200 Grupo 1 Slovenia 20.00% 2 0 0 20 200 Grupo 1 Spain 16.00% 2 0 0 20 200 Grupo 1 Sweden 25.00% 2 0 0 20 200 Grupo 1 UK 17.50% 2 0 0 20 200 Grupo 1 39 The Impact of Taxation on the Development of the Mobile Broadband Sector 2. Taxes on handsets VAT or Custom Other Fixed taxes Group similar VAT Customs Fixed Telecoms Matrix 1 Matrix 2 Filter Duty* Taxes (US$) Name taxes (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) AFRICA Angola 10.00% 5.00% 1 1 0 0 11 00 1100 Grupo 1 Botswana 10.00% 7.00% 1 0 0 2 10 02 1002 Grupo 3 Burkina Faso 18.00% 13.30% 1.00% 2 2 0 1 22 01 2201 Grupo 3 Cameroon 19.25% 29.90% 2 2 0 0 22 00 2200 Grupo 2 Chad 18.00% 28.50% 2 2 0 0 22 00 2200 Grupo 2 #OTE D)VOIRE 18.00% 5.00% 2.50% 2 1 0 1 21 01 2101 Grupo 3 DRCongo 13.00% 19.00% 2 2 0 0 22 00 2200 Grupo 2 Egypt 10.00% 1 0 0 0 10 00 1000 Grupo 1 Ethiopia 15.00% 10.00% 2 1 0 0 21 00 2100 Grupo 1 Gabon 18.00% 9.50% 2 1 0 0 21 00 2100 Grupo 1 Gambia 15.00% 20.00% 2 2 0 0 22 00 2200 Grupo 2 Ghana 12.50% 9.50% 5.50% 2 1 0 2 21 02 2102 Grupo 3 Guinea 18.00% 11.90% 2 2 0 0 22 00 2200 Grupo 2 Guinea-Bissau 15.00% 2 0 0 0 20 00 2000 Grupo 1 Kenya 16.00% 2 0 0 0 20 00 2000 Grupo 1 Lesotho 14.00% 0.00% 7.00% 2 0 0 2 20 02 2002 Grupo 3 Madagascar 18.00% 9.50% 3.00% 2 1 0 1 21 01 2101 Grupo 3 Mauritania 14.00% 2 0 0 0 20 00 2000 Grupo 1 Mauritius 15.00% 2 0 0 0 20 00 2000 Grupo 1 Morocco 20.00% 2.50% 2 1 0 0 21 00 2100 Grupo 1 Mozambique 17.00% 25.00% 1.00% 2 2 0 1 22 01 2201 Grupo 3 Nigeria 5.00% 9.50% 7.50% 1 1 0 2 11 02 1102 Grupo 3 Rwanda 18.00% 30.00% 2 2 0 0 22 00 2200 Grupo 2 Senegal 18.00% 10- 1.50% 2 2 0 1 22 01 2201 Grupo 3 20.00% Seychelles 12.00% 0 2 0 0 02 00 0200 Grupo 2 Sierra Leone 10.00% 1 0 0 0 10 00 1000 Grupo 1 South Africa 14.00% 7.60% 2 1 0 0 21 00 2100 Grupo 1 Swaziland 14.00% 0 2 0 0 02 00 0200 Grupo 2 Tanzania 20.00% 2 0 0 0 20 00 2000 Grupo 1 Tunisia 10.00% 8.00% 1 0 0 2 10 02 1002 Grupo 3 Uganda 18.00% 2 0 0 0 20 00 2000 Grupo 1 Zambia 17.50% 4.80% 2 1 0 0 21 00 2100 Grupo 1 Zimbabwe 15.00% 2 0 0 0 20 00 2000 Grupo 1 Note: Columns (5), (6), (7) and (8) represent codes defined according to tax levels of columns (1), (2), (3) and (4); columns (9), (10) and (11) combine codes and determine the type of taxation approach by country: Group 1 (Sector discrimination limited to import duty); Group 2 (Sector discrimination based on moderate duty and telecom tax); Group 3 (Sector discrimination based on handset specific tax); Group 4 (Maximize tax revenues). 40 The Impact of Taxation on the Development of the Mobile Broadband Sector VAT or Custom Other Fixed taxes Group similar VAT Customs Fixed Telecoms Matrix 1 Matrix 2 Filter Duty* Taxes (US$) Name taxes MIDDLE EAST Iran 60.00% 0 2 0 0 02 00 0200 Grupo 2 Jordan 0.00% 0.00% 0 0 0 0 00 00 0000 Grupo 1 Syria 20.00% 10.00% 14.38-33.67 2 1 2 0 21 20 2120 Grupo 3 Turkey 18.00% 20.00% 2 0 0 2 20 02 2002 Grupo 3 Yemen 5.00% 5.00% 3.00% 1 1 0 1 11 01 1101 Grupo 3 ASIA PACIFIC Bangladesh 15.00% 12.00% 11.63 2 2 2 0 22 20 2220 Grupo 4 Bhutan 10.00% 30.00% 1 2 0 0 12 00 1200 Grupo 2 Cambodia 10.00% 10.00% 1 1 0 0 11 00 1100 Grupo 1 China 17% or 20.00% 2 2 0 0 22 00 2200 Grupo 2 3% India 4.00% 13.00% 1.36 1 2 1 0 12 10 1210 Grupo 3 Indonesia 10.00% 18.00% 1 2 0 0 12 00 1200 Grupo 2 Lao 10.00% 10.00% 1 1 0 0 11 00 1100 Grupo 1 Malaysia 10.00% 1 0 0 0 10 00 1000 Grupo 1 Myanmar 0.00% 21.00% 0 2 0 0 02 00 0200 Grupo 2 Nepal 13.00% 5.00% 1.50% 2 1 0 1 21 01 2101 Grupo 3 Pakistan 6.00 0 0 1 0 00 10 0010 Grupo 3 Papua New Guinea 10.00% 0.00% 1 0 0 0 10 00 1000 Grupo 1 Philippines 12.00% 2 0 0 0 20 00 2000 Grupo 1 Samoa 12.50% 20.00% 2 2 0 0 22 00 2200 Grupo 2 Sri Lanka 33.00% 0 2 0 0 02 00 0200 Grupo 2 Thailand 7.00% 1 0 0 0 10 00 1000 Grupo 1 Vietnam 10.00% 7.50% 1 1 0 0 11 00 1100 Grupo 1 LATIN AMERICA Argentina 21.00% 0%-20% 2 2 0 0 22 00 2200 Grupo 2 Bolivia 13.00% 10.00% 2 1 0 0 21 00 2100 Grupo 1 Brazil 33.00% 19.00% 9.30% 13.35 2 2 2 2 22 22 2222 Grupo 4 Chile 19.00% 6.00% 2 1 0 0 21 00 2100 Grupo 1 Colombia 16.00% 5.00% 2 1 0 0 21 00 2100 Grupo 1 Dominican Republic 0 0 0 0 00 00 0000 Grupo 1 Ecuador 12.00% 2 0 0 0 20 00 2000 Grupo 1 Guatemala 12.00% 2 0 0 0 20 00 2000 Grupo 1 Mexico 16.00% 0.10% 2 1 0 0 21 00 2100 Grupo 1 Nicaragua 15.00% 2 0 0 0 20 00 2000 Grupo 1 Paraguay 10.00% 3.00% 1 1 0 0 11 00 1100 Grupo 1 Peru 19.00% 4.00% 2 1 0 0 21 00 2100 Grupo 1 Trinidad and Tobago 15.00% 25.00% 2 2 0 0 22 00 2200 Grupo 2 Venezuela 14.00% 14.00% 2 2 0 0 22 00 2200 Grupo 2 41 The Impact of Taxation on the Development of the Mobile Broadband Sector VAT or Custom Other Fixed taxes Group similar VAT Customs Fixed Telecoms Matrix 1 Matrix 2 Filter Duty* Taxes (US$) Name taxes RUSSIA/CIS/CENTRAL AND EASTERN EUROPE Albania 20.00% 0.00% 2 0 0 0 20 00 2000 Grupo 1 Azerbaijan 18.00% 15.00% 2 2 0 0 22 00 2200 Grupo 2 Georgia 18.00% 12.00% 2 2 0 0 22 00 2200 Grupo 2 Kazakhstan 15.00% 0.00% 2 0 0 0 20 00 2000 Grupo 1 Russia 18.00% 5.00% 2 1 0 0 21 00 2100 Grupo 1 Ukraine 20.00% 2 0 0 0 20 00 2000 Grupo 1 Uzbekistan 20.00% 0.20% 2 1 0 0 21 00 2100 Grupo 1 WESTERN EUROPE Austria 20.00% 2 0 0 0 20 00 2000 Grupo 1 Bulgaria 20.00% 2 0 0 0 20 00 2000 Grupo 1 Cyprus 15.00% 2 0 0 0 20 00 2000 Grupo 1 Czech Republic 19.00% 2 0 0 0 20 00 2000 Grupo 1 Denmark 25.00% 2 0 0 0 20 00 2000 Grupo 1 Estonia 18.00% 2 0 0 0 20 00 2000 Grupo 1 France 19.60% 2 0 0 0 20 00 2000 Grupo 1 Finland 22.00% 2 0 0 0 20 00 2000 Grupo 1 Germany 16.00% 2 0 0 0 20 00 2000 Grupo 1 Greece 19.00% 2 0 0 0 20 00 2000 Grupo 1 Hungary 20.00% 2 0 0 0 20 00 2000 Grupo 1 Ireland 21.00% 2 0 0 0 20 00 2000 Grupo 1 Italy 20.00% 2 0 0 0 20 00 2000 Grupo 1 Latvia 18.00% 2 0 0 0 20 00 2000 Grupo 1 Lithuania 18.00% 2 0 0 0 20 00 2000 Grupo 1 Luxembourg 15.00% 2 0 0 0 20 00 2000 Grupo 1 Malta 18.00% 2 0 0 0 20 00 2000 Grupo 1 Netherlands 19.00% 2 0 0 0 20 00 2000 Grupo 1 Poland 22.00% 2 0 0 0 20 00 2000 Grupo 1 Portugal 21.00% 2 0 0 0 20 00 2000 Grupo 1 Romania 19.00% 2 0 0 0 20 00 2000 Grupo 1 Slovakia 19.00% 2 0 0 0 20 00 2000 Grupo 1 Slovenia 20.00% 2 0 0 0 20 00 2000 Grupo 1 Spain 16.00% 2 0 0 0 20 00 2000 Grupo 1 Sweden 25.00% 2 0 0 0 20 00 2000 Grupo 1 UK 17.50% 2 0 0 0 20 00 2000 Grupo 1 42 The Impact of Taxation on the Development of the Mobile Broadband Sector C. Case studies: country context %DQG$RSHUDWLRQV LQLWDFTXLUHGDPDMRULW\VWDNH LQ3HJDVR%RWKFRPSDQLHVFKDQJHGWKHLUSODWIRUPV 1. 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Mexico: Wireless subscribers PDUNHW VDZ D IHZ QHZ HQWUDQWV 3RLQWWRSRLQW ZLUHOHVVOLQNVZHUHDXFWLRQHGWKHVDPH\HDU,WZDV 100% QRW XQWLO WKDW 3&6 VSHFWUXP *+] ZDV % of prepaid DXFWLRQHG7ZRQDWLRQDOOLFHQVHV GLYLGHGLQUHJLRQDO 75% FRQFHVVLRQV ZHUHDZDUGHG 8QHIyQ *UXSR6DOLQDV ZKR ODWHU ERXJKW ,XVDFHOO IURP %HOO $WODQWLF DQG 9RGDIRQH DQG 3HJDVR 'XULQJ WKH SURFHVV 7HOPH[ 50% WKURXJKLWVPRELOHVXEVLGLDU\7HOFHO DOVRDFTXLUHG Mobile penetration VSHFWUXP2QHFRQFHVVLRQ 5HJLRQ ZDVDZDUGHGWR DORFDOLQYHVWRU WKLVVSHFWUXPUHPDLQVXQXVHG%DQG 25% $ DQG %DQG % ZHUH RSHUDWLQJ 7'0$ WHFKQRORJ\ ZKLOH3HJDVRDQG8QHIyQODXQFKHG&'0$VHUYLFHV 0% ,Q 7HOPH[ VSXQ RII 7HOFHO FUHDWLQJ $PpULFD 1Q02 4Q02 3Q03 2Q04 1Q05 4Q05 3Q06 2Q07 1Q08 4Q08 3Q09 0yYLO$OVRLQ7HOHIyQLFDDFTXLUHGWKH0RWRUROD Sources: ITU; Wireless Intelligence 17 Even so, there were no interconnection regulations that would have allowed competition until 1998. 18 The law provided for uncapped foreign direct investment only in mobile telephony (full foreign ownership for fixed and other telecommunications services is still widely discussed in Congress 15 years later). 43 The Impact of Taxation on the Development of the Mobile Broadband Sector 7KHPRELOHPDUNHWLQ0H[LFRUHSRUWHGDSHQHWUDWLRQ Figure C.3. Mexico: Mobile Industry structure (2009) RI RI ZKLFK DUH SUHSDLG VXEVFULEHUV D ORZ SHUIRUPDQFH IRU WKH VL]H RI LWV HFRQRP\ $ 3.58% 4.38% 1(0%&5)('.$'#8,)+'/+,(3$).)+#0$*('$/55$/1+,4#$%"(3#)$ HQWHUHGLQWRHIIHFWLQ $WWKHWLPHWKLVUHSRUWZDV ZULWWHQWKHUHZDVVWLOODQRQJRLQJGHEDWHZKHWKHU WRGLVFRQQHFWWKRVHOLQHVWKDWGLGQRWUHJLVWHU LIWKDW LVWKHFDVHSHQHWUDWLRQLVERXQGWRGHFUHDVHE\DERXW 20.30% 71.74% Figure C.2. Mobile subscribers and economic development (2009) 150% Telcel (AMX) Telefonica Movistar 113% Iusacell Nextel ation (%) r Source: Wireless Intelligence 75% Mexico 2. 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Malaysia: Mobile Subscribers 25% 110% 400% 39% 83% 300% ation r 55% 200% ercent prepaid P Wireless penet 28% 100% 34% Maxis Mobile celcom Axiata 0% 0% DIGI.com U Mobile 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 Source: Wireless Intelligence Source: Wireless Intelligence 7KH ZLUHOHVV RSHUDWRUV DUH IRFXVHG RQ RIIHULQJ C#0/3-$*('$0(6,5#$6'(/-6/3-$"/)$1(3+,3&#-$+($',)#$ EURDGEDQGVHUYLFHV VWHDGLO\ WKHQXPEHURIWRWDOVXEVFULEHUVZDVXSE\ LQ DQG JURZWK GXULQJ 7KLV $ -0D[LVSURYLGHV+63$EDVHGZLUHOHVVEURDGEDQG PRELOH PDUNHW JURZWK LV UHÁHFWHG LQ LWV JRRG OHYHO ,QWHUQHW DFFHVV WRJHWKHU ZLWK &HOFRP DQG QHZ RIHFRQRPLFGHYHORSPHQWZKLFKLVRQHRIWKHEHVW FHOOXODUWHOHSKRQHFRPSDQ\X0RELOH DPRQJGHYHORSLQJFRXQWULHV VHH)LJXUH& $ -'L*L FXUUHQWO\ SURYLGHV ('*(EDVHG ZLUHOHVV FRQQHFWLYLW\ DQG H[SHFWV WR ODXQFK +63$EDVHG Figure C.5. Mobile Subscribers and Economic Development ZLUHOHVVEURDGEDQGVHUYLFHXVLQJ7LPHGRW&RP·V (*) (2009) * OLFHQVH LQ HDUO\ *356 VHUYLFHV DUH DYDLODEOHYLD*PRELOHVHUYLFHV 150% Malaysia $JRYHUQPHQWVWXG\LQGLFDWHGWKDWE\ RI 113% ZLUHOHVVVXEVFULEHUVZHUHXVLQJ*DVWKHLUSULPDU\ EURDGEDQG FRQQHFWLRQ 0&0& 0RELOH %URDGEDQG ation (%) r 75% 6WXG\ *XSJUDGHVWR+6'3$KDYHLPSURYHG VHUYLFH TXDOLW\ DQG GHPDQG LV VWURQJ * GHYLFH 38% SHQHWUDWLRQUHDFKHGRIWRWDOSRSXODWLRQ Wireless penet )L[HGEURDGEDQGKDVEHHQGHSOR\LQJDWDUHODWLYHO\ 0% VORZ SDFH ZKLFK KDV SURPSWHG WKH QHHG WR 0 3750 7500 11250 15000 HPSKDVL]H ZLUHOHVV EURDGEDQG DV DQ DOWHUQDWLYH GDP per capita SODWIRUP )L[HG EURDGEDQG SHQHWUDWLRQ DV RI (*) For emerging countries ZDVDWRIKRXVHKROGVPRVWRILWFRQFHQWUDWHGLQ XUEDQDUHDV WKHJRYHUQPHQWREMHFWLYHLVWRUHDFK Sources: ITU; World Bank; TAS analysis SHQHWUDWLRQE\WKHHQGRI7RUHDFKWKLVWDUJHW WKH JRYHUQPHQW KDV LVVXHG QHZ VSHFWUXP OLFHQVHV WR IRXU FRPSDQLHV WKDW ZLOO UROO RXW QHZ ZLUHOHVV EURDGEDQG VHUYLFHV EDVHG RQ :LPD[ SODWIRUPV 45 The Impact of Taxation on the Development of the Mobile Broadband Sector &RYHUDJH WDUJHWV VWLSXODWH WKDW WKH FRPSDQLHV +HDY\LQYHVWPHQWUHTXLUHPHQWVGXULQJSULYDWL]DWLRQ VKRXOGUHDFKRIWKHSRSXODWLRQE\0DUFK SURYLGHGIRUJURZWKWREHDOPRVWLQOHVVWKDQ ZLWK FRPPLWPHQWV WR UHDFK LQWR RXWHU UHJLRQV 7R ÀYH\HDUV,QQHZVSHFWUXPZDVOLFHQVHG 3&6 UDWLRQDOL]H FDSLWDO LQYHVWPHQW WKH JRYHUQPHQW KDV ² *+] DOORZLQJÀ[HGOLQHFDUULHUVWRSDUWLFLSDWH IRUFHGVKDULQJDJUHHPHQWVIRUWRZHUVDPRQJ+6'3$ LQ WKH ELG 7HOHPDU2L DQG %UDVLO 7HOHFRP À[HG DQG:LPD[RSHUDWRUV LQFXPEHQWV LQ VRXWKFHQWUH DQG QRUWKQRUWKHDVW DFTXLUHG OLFHQVHV WKXV EHLQJ DEOH WR RIIHU EXQGOHG /DXQFKHGLQ6HSWHPEHU0DOD\VLD·VKLJKVSHHG VHUYLFHVDQG7,0FRPSOHWHGLWVQDWLRQZLGHIRRWSULQW EURDGEDQGSURMHFWLVD\HDUFROODERUDWLYHHIIRUWE\ 7KURXJK D MRLQW YHQWXUH WRJHWKHU ZLWK 3RUWXJDO LQFXPEHQW WHOHSKRQH FRPSDQ\ 7HOHNRP 0DOD\VLD 7HOHFRP DQG DQ DFTXLVLWLRQ VSUHH 7HOHIRQLFD 70 DQG 0DOD\VLD·V 0LQLVWU\ RI (QHUJ\ :DWHU EXLOW DQ DOPRVW QDWLRQDO SUHVHQFH 0LQDV *HUDLV DQG &RPPXQLFDWLRQV WR SURYLGH À[HG EURDGEDQG H[FOXGHG DW WKH WLPH LW ÀQDOO\ ERXJKW 7HOHPLJ LQ FRQQHFWLYLW\ QDWLRQZLGH XQGHU LWV ÀUVW SKDVH LW 6LQFH $PHULFD 0RYLO VWDUWHG DFTXLULQJ DLPVWRSURYLGHDFFHVVWRRYHUPLOOLRQSUHPLVHV PRVWO\ % EDQG OLFHQVHV E\ LW DOUHDG\ KDG D E\70ZLOOSURYLGHWKHODVWPLOHDFFHVVKRPHV QDWLRQZLGHIRRWSULQW7HOPH[ZLWKKHDY\RZQHUVKLS DQG EXVLQHVVHV XVLQJ À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·VSDUWLVPRVWO\WR PDNH XS IRU ORZHU QHW SUHVHQW YDOXH LQ DUHDV VXFK ,Q QHZ OLFHQVHV ZHUH DZDUGHG SURYLGLQJ DV QHZ KRXVLQJ HVWDWHV DQG QHZ LQGXVWULDO ]RQHV VSHFWUXPIRU*VHUYLFHV$VPDOOQHZHQWUDQWDQG ZKLFK DUH UHJDUGHG DV FRPPHUFLDOO\ QRQSURÀWDEOH 2L DFTXLUHG VSHFWUXP LQ 6DR 3DXOR ,QFXPEHQW *('$+#5#1(00&3,1/+,(3)$1(0%/3,#)7 FRPSDQLHV $PHULFD 0RYLO 9LYR7HOHIRQLFD37 7,0 DOVR DFTXLUHG PRUH VSHFWUXP $ %DQG DQG % :LUHOHVV EURDGEDQG GHSOR\PHQW LV VXSSRUWHG E\ %DQGOLFHQVHVRSHUDWHG7'0$DQG&'0$V\VWHPV UHO\LQJ RQ WKH SURFHHGV RI WKH 8QLYHUVDO 6HUYLFH 7KH À[HG OLQH LQFXPEHQWV DQG 7,0 ODXQFKHG *60 3URYLVLRQ )XQG ZRUWK 86' PLOOLRQ DV ZHOO RSHUDWLRQV 9LYR VZLWFKHG WR *60 WHFKQRORJ\ LQ /)$ +/2$ ,31#3+,4#)$ (3$ ,34#)+0#3+$ ,3$ 6'(/-6/3-$ ,3*'/)+'&1+&'#7 :KHQ7HOHIRQLFDDFTXLUHGDVWDNHLQ7HOHFRP,WDOLD 3. 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Brazil: Mobile industry structure The Brazilian mobile market has the advantage of D KHDOWK\ FRPSHWLWLRQ * WDNHXS DOUHDG\ UHDFKHG 1% PLOOLRQ E\ +RZHYHU WKHUH DUH VHYHUDO 21% UHPRWH DUHDV RI WKH FRXQWU\ WKDW DUH VWLOO ZLWKRXW 29% WHOHFRPPXQLFDWLRQV LQIUDVWUXFWXUH DQG UHDFKLQJ WKHVHZLOOEHFRVWO\ 4. Bangladesh The Bangladeshi telecommunications sector ZDV RSHQHG WR FRPSHWLWLRQ ZLWK WKH 24% 1DWLRQDO 7HOHFRPPXQLFDWLRQV 3ROLF\ DQG 7HOHFRPPXQLFDWLRQV $FW 7KH PDUNHW LV UHJXODWHG 25% E\ DQ LQGHSHQGHQW DJHQF\ WKH %DQJODGHVK 7HOHFRPPXQLFDWLRQ5HJXODWRU\&RPPLVVLRQ %75& Vivo Claro TIM Brasil WKDW ZDV FUHDWHG LQ DQG LV UHVSRQVLEOH IRU Oi Nextel OLFHQVLQJRSHUDWRUVHQVXULQJFRPSOLDQFHZLWKOLFHQVH WHUPV DQG FRQGLWLRQV PDQDJLQJ UDGLR VSHFWUXP Source: Wireless Intelligence PRQLWRULQJ TXDOLW\ RI WHOHFRPV VHUYLFHV VHWWOLQJ interconnection disputes and approving tariffs. The 0RELOH JURZWK KDV FRQWLQXHG WR VORZ DQG QHW 0LQLVWU\ RI 3RVWV DQG 7HOHFRPPXQLFDWLRQV 0R37 DGGLWLRQV DUH ORZHU +RZHYHU ZLUHOHVV SHQHWUDWLRQ acts as policy maker in the sector. UHDFKHG LQ (YHQ PRUH WKH VL]H RI WKH Brazilian market means that it still adds a large $Q DPHQGPHQW RI WKH 7HOHFRPPXQLFDWLRQV $FW RI QXPEHU RI QHZ FXVWRPHUV HDFK TXDUWHU SURYLGLQJ ZDV DSSURYHG E\ SDUOLDPHQW RQ -XO\ SOHQW\ RI RSSRUWXQLWLHV IRU WKH FRXQWU\·V PRELOH 7KLV ELOO KDV WUDQVIHUUHG VRPH UHJXODWRU\ SRZHUV RSHUDWRUV*KDVSURYHQYHU\SRSXODUDQGZLOOKHOS VXFKDVLVVXLQJOLFHQFHVDQGÀ[LQJWDULIIV IURP%75& WR NHHS GULYLQJ WKH PDUNHW IRUZDUG DV RSHUDWRUV WRWKHWHOHFRPVPLQLVWU\DQGLQWURGXFHVD8QLYHUVDO increasingly look to provide services in more remote 6HUYLFH 7D[ LQ IRUP RI D 6RFLDO 2EOLJDWLRQ )XQG DUHDV &RQFHVVLRQ KROGHUV DUH UHTXLUHG WR H[SDQG DOWKRXJKWKHFRXQWU\·VPRUHWKDQ RIODQGPDVV VHUYLFHVLQDFFRUGDQFHZLWKWKHWHUPVRIWKHLUOLFHQVHV and population are already under mobile coverage. EXW QHZ JURZWK ZLOO FRPH IURP WKHVH DUHDV LQ DQ\ FDVHPHDQLQJRSHUDWRUVDUHDOUHDG\ORRNLQJRXWVLGH 1DWLRQZLGH RSHUDWLQJ OLFHQVHV ZHUH LVVXHG WR PDMRU WRZQV DQG FLWLHV LQ RUGHU WR PDLQWDLQ WKHLU +XWFKLVRQ %DQJODGHVK 7HOHFRP /LPLWHG +%7/ JURZWKUDWHV VHH)LJXUH& IRU PRELOH DQG À[HG ZLUHOHVV DSSOLFDWLRQV DQG WR %DQJODGHVK 5XUDO 7HOHFRP $XWKRULW\ %57$ IRU Figure C.8. Brazil Wireless Penetration UXUDOWHOHSKRQ\3DFLÀF%DQJODGHVK7HOHFRP 3%7/ DFTXLUHG +%7/ LQ 6LQFH WKHQ IRXU OLFHQVHG 90% private sector mobile operators and a number of YDOXH DGGHG VHUYLFH SURYLGHUV LQFOXGLQJ ,QWHUQHW 68% 6HUYLFH 3URYLGHUV KDYH HQWHUHG WKH %DQJODGHVKL ation r market. 45% 7KH À[HG VHJPHQW RI WKH PDUNHW FRQWLQXHV WR EH GRPLQDWHGE\WKHVWDWHRZQHGHQWHUSULVHDQGWKHORZ Wireless penet 23% OHYHO RI LQYHVWPHQWV GHSHQGV RQ WKH JRYHUQPHQW·V scarce availability of funds. The mobile sector has 0% UHFHLYHG D PRUH VWHDG\ ÁRZ RI LQYHVWPHQW OHG E\ *UDPHHQ3KRQH6L[PDLQRSHUDWRUVDUHSUHVHQWLQWKH 1Q00 4Q00 3Q01 2Q02 1Q03 4Q03 3Q04 2Q05 1Q06 4Q06 3Q07 2Q08 1Q09 PRELOHPDUNHWEXW*UDPHHQ3KRQHLVWKHGRPLQDQW Source: Wireless Intelligence SOD\HU VHH)LJXUH& 47 The Impact of Taxation on the Development of the Mobile Broadband Sector Figure C.9. Bangladesh Mobile Industry Structure Figure C.10. Bangladesh Wireless Penetration 2.1% 40% 3.9% 5.3% 30% ation r 21.6% 43.5% 20% Wireless penet 10% 0% 23.7% Grameen Phone Banglalink GSM 2Q03 4Q03 2Q04 4Q04 2Q05 4Q05 2Q06 4Q06 2Q07 4Q07 2Q08 4Q08 2Q09 Axiata-Aktel Warid telecom Pacific Bangladesh Teletalk Sources: Wireless Intelligence Source: Wireless Intelligence 1HZ GHSOR\PHQW ZLOO EH REVHUYHG DV EURDGEDQG $FFRUGLQJWRWKH:RUOG%DQNWKHWHOHFRPPXQLFDWLRQV ZLUHOHVV DFFHVV OLFHQVHV ZHUH LVVXHG LQ 6HSWHPEHU VHFWRU RI %DQJODGHVK KDV ´IDOOHQ IDU VKRUW RI LWV ZLWK HDFK OLFHQVH UHTXLULQJ WKH GHSOR\PHQW SRWHQWLDO DQG UHPDLQV D VLJQLÀFDQW FRQVWUDLQW WR RI EDVH VWDWLRQV 7KLV PDUNHW DOVR EHQHÀWV IURP HFRQRPLFJURZWKµ:HDNOHYHOVRIFRPSHWLWLRQDVZHOO WKH SUHVHQFH RI VHYHUDO NH\ VWUDWHJLF LQYHVWRUV DVORZSULYDWHLQYHVWPHQWDUHWKHWZRPDLQFDXVHVRI LQFOXGLQJ 7HOHQRU RI 1RUZD\ 0DOD\VLD·V $[LDWD WKLV SRRU VHFWRU SHUIRUPDQFH 0RUHRYHU VSHFWUXP (J\SW·V2UDVFRPDQG6LQJ7HORI6LQJDSRUH$XFWLRQ PDQDJHPHQW KDV EHHQ LQHIÀFLHQW ZLWK LUUHJXODU RI*OLFHQVHVSUHVHQWVRSSRUWXQLW\IRUQHZIRUHLJQ LVVXDQFHRIIUHTXHQFLHVZLWKDOOHJDWLRQVRIFRQÁLFWV LQYHVWRUVWRHQWHUWKLVKLJKJURZWKPDUNHW9LHWQDP·V RI LQWHUHVW 2YHUDOO WKH UHJXODWRU\ HQYLURQPHQW LQ 9LHWWHO LV ORRNLQJ WR LQYHVW D VWDNH LQ 7HOHWDON ;/385/-#)"$ ,)$ ,3#**#1+,4#$ /3-$ +"#$ %&65,1$ )#1+('$ ,)$ ZKLOH,QGLD·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·VHVWLPDWHG ([SDQVLRQ SURMHFW EHLQJ MRLQWO\ ÀQDQFHG E\ WKH *(&'$ 0,55,(3$ ,3+#'3#+$ &)#')$'#%('+#-5.$ /11#)),38$+"#$ %DQJODGHVKL DQG 6RXWK .RUHDQ JRYHUQPHQWV 7KH ZHEYLDFHOOXODUQHWZRUNV FXUUHQW JRYHUQPHQW·V HOHFWLRQ SOHGJHV WR FUHDWH D ¶GLJLWDO %DQJODGHVK· ZLWK WKH DLP RI VXSSRUWLQJ *UDPHHQ3KRQH ODXQFKHG ('*( LQ 6HSWHPEHU HFRQRPLFJURZWK+RZHYHULQDFRQWUDGLFWRU\SROLF\ EHIRUH H[SDQGLQJ WKH * QHWZRUN WR DOO DUHDV RI WKHVORZHUUDWHRIJURZWKLQ ZKLFKVDZ 00 WKH FRXQWU\ 0DMRU *60 RSHUDWRUV DUH LQWHUHVWHG QHWDGGLWLRQVDVFRPSDUHGWR00QHWDGGLWLRQV LQ PRYLQJ XS WR * WHFKQRORJ\7KUHH OLFHQVHV DUH LQZDVWKHUHVXOWRI6,0WD[DWLRQLQWURGXFHGE\ H[SHFWHGWREHRIIHUHG WKHJRYHUQPHQWKDVLQGLFDWHG +"#$8(4#'30#3+7 RQHVHWRI0+]IUHTXHQFLHVZLOOEHUHVHUYHGIRU 7HOHWDONDQGKDVVHWDWDUJHWRIPLOOLRQ*XVHUV 5. South Africa IRUWKHVWDWHUXQ&HOOFRLQWKHQH[WIHZ\HDUV 5HJXODWLRQ RI 6RXWK $IULFD·V WHOHFRPV LQGXVWU\ LV GLYLGHGEHWZHHQWKH'HSDUWPHQWRI&RPPXQLFDWLRQV 7KH%DQJODGHVKLPRELOHPDUNHWKDVEHQHÀWHGIURP DQGWKH,QGHSHQGHQW&RPPXQLFDWLRQV$XWKRULW\RI DUDSLGO\H[SDQGLQJPRELOHVHFWRU SHQHWUDWLRQZDV 6RXWK$IULFD ,&$6$ 'XULQJWKHODVWGHFDGH6RXWK MXVWDWWKHHQGRI WKXVWKHUHLVDVLJQLÀFDQW $IULFDQ DXWKRULWLHV KDYH LPSOHPHQWHG QXPHURXV JURZWKSRWHQWLDO VHH)LJXUH& '#*('0)$ ,3$ +"#$ +#5#1(00&3,1/+,(3)$ )#1+('$ +"/+$ 48 The Impact of Taxation on the Development of the Mobile Broadband Sector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igure C.11. 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South Africa: Mobile Industry Structure FUHDWLRQRIDIXOO\VWDWHRZQHGEURDGEDQGRSHUDWRU ZKLFK LV DOVR H[SHFWHG WR DGGUHVV WKH KLJK FRVW RI LQWHUQDWLRQDO FDEOH EDQGZLGWK FXUUHQWO\ SURYLGHG #215&),4#5.$ 6.$ +"#$ ,31&06#3+7$ !"#$ %(+#3+,/55.$ 13.0% FRPSHWLWLYH EHQHÀWV RI PDUNHW UHIRUP DUH QRW HYLGHQWPRUHWKDQVHYHQ\HDUVDIWHUWKHRIÀFLDOHQG WR 7HONRP·V PRQRSRO\,WV SHUVLVWHQW GRPLQDQFH RI 53.0% +"#$ 0/':#+$ 1(3+,3&#)$ +($ 1(3)+'/,3$ +"#$ 1(0%#+,+,4#$ 34.0% )#'4,1#)$)#80#3+$(*$+"#$0/':#+$/3-$/11#))$/3-$&)/8#$ DW WKH UHWDLO OHYHO 7HONRP·V XQULYDOOHG GRPLQDQFH LQ WKH ZKROHVDOH VHFWRU KDV EHHQ UHJXODUO\ FLWHG DV DPDMRUIDFWRUEHKLQGWKHFRXQWU\·VORZWHOHGHQVLW\ DQGSRRUWDNHXSRIEURDGEDQGVHUYLFHV Vodacom MTN South Africa Cell C Source: Wireless Intelligence 49 The Impact of Taxation on the Development of the Mobile Broadband Sector 5HODWLYH WR 071 9RGDFRP KDV VLJQLÀFDQWO\ ,31'#/)#-$,+)$,34#)+0#3+$/3-$"/)$6##3$/+$+"#$*('#*'(3+$ RI WHFKQRORJLFDO LQQRYDWLRQ LQ WKH 6RXWK $IULFDQ PDUNHW7KLVH[SODLQVWRDODUJHGHJUHHWKHVLJQLÀFDQW JURZWKLQVXEVFULEHUQXPEHUVZKLFKLVH[SHFWHGWR UHDFKGXULQJ 0RELOH GDWD KDV EHHQ JURZLQJ RYHU WKH SDVW ÀYH \HDUVSDUWO\GULYHQE\WKHPDUNHWPLJUDWLRQWR* 6/)#-$ )#'4,1#)7$ C#0/3-$ *('$ 0(6,5#$ -/+/$ )#'4,1#)$ ,)$ JURZLQJ LQ 6RXWK $IULFD ZLWK PRELOH EURDGEDQG VHHQ DV D VROXWLRQ ZKLFK FRXOG ERRVW WKH FRXQWU\·V XQGHUSHUIRUPLQJ EURDGEDQG LQGXVWU\ DV D ZKROH 7KHLQWURGXFWLRQRIWRQHZXQGHUVHDFDEOHVZLOO VXUHO\VHHDJURZWKLQWKHLQGXVWU\ $ 7KH6RXWK$IULFDQPRELOHLQGXVWU\EHQHÀWVIURP* VHUYLFHV RIIHUHG E\ WZR OHDGLQJ QHWZRUN RSHUDWRUV 9RGDFRPDQG071ERWKRIZKLFKKDYHLQWHUQDWLRQDO %'#)#31#7$ !"#)#$ 1(0%/3,#)$ "/4#$ 6##3$ -#%5(.,38$ PXOWLPHGLDFRQWHQWVHUYLFHVSURYLGLQJRSSRUWXQLWLHV IRUFRQWHQWSURYLGHUV'HVSLWHKDYLQJIDOOHQLQ $538 OHYHOV FRQWLQXHG WR ULVH WKURXJKRXW +RZHYHU6RXWK$IULFD·VWHOHFRPVUHJXODWRU,&$6$ /%%#/')$+($6#$,3#**#1+,4#$,3$5,6#'/5,<,38$+"#$0/':#+7$ 0RUHRYHU WKH PRELOH PDUNHW OHDGHU H[SHULHQFHG QHJDWLYH JURZWK IRU WKH TXDUWHU ZLWK LWV FXVWRPHU 3&06#')$6#,38$/-4#')#5.$/**#1+#-$6.$+"#$,3+'(-&1+,(3$ RIFRPSXOVRU\6,0UHJLVWUDWLRQRQ-XO\ 50 The Impact of Taxation on the Development of the Mobile Broadband Sector D. Economic Impact of Broadband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·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ÀUVW %'(65#0$'#*#')$+($+"#$*/1+$+"/+$+"#$1(3)+/3+$-(#)$3(+$ 1/%+&'#$+"#$%(+#3+,/5$-,**#'#31#)$/0(38$1(&3+',#)$,3$ WHUPVRIVSHFLÀFIDFWRUV2QHSRVVLEOHVROXWLRQLVWR UHO\RQSDQHOGDWDZKLFKZRXOGDOORZFRQWUROOLQJ IRU WKH FRXQWU\ LGLRV\QFUDWLF IDFWRUV +RZHYHU +"#$5,0,+#-$/4/,5/6,5,+.$(*$-/+/$%'#4#3+#-$&)$*'(0$ UHO\LQJ RQ WKLV DSSURDFK +RZHYHU E\ LQFOXGLQJ WKHWHFKQRORJ\IDFWRU HJEURDGEDQG ZHUHGXFHG +"#$%'(65#0)$5,3:#-$+($+"#$(0,++#-$4/',/65#)7 Figure 2. Variables utilized to measure broadband impact on economic growth Type of variable Data set Source Rationale Economic growth GDP (2004-8) World Bank Dependent variable Control for level of GDP per capita World Bank Measure for starting point of development (2000) growth Control for )NVESTMENT'$0 World Bank Measure for differences in Investment 8) investment levels Control for Human Tertiary education Unesco, Earthtrends, University Measure for differences in Capital (2002) of West Indies, Euromonitor, human capital Government of the Commonwealth of Dominica Broadband penetration Broadband penetration growth ITU Independent variable growth (2003-4) 19 We have broadband penetration data for the majority of Latin American and Caribbean countries after 2003 (19 countries included in the sample). 51 The Impact of Taxation on the Development of the Mobile Broadband Sector 7KHUHVXOWVZHUHDVIROORZV Figure 3. Broadband impact on economic growth in Latin America GDP growth Coefficient Standard error T-statistic P>[t] 95% Conf. interval GDP per capita 2000 -.0006045 .0002142 -2.82 0.011 -.0010528 )NVESTMENT'$0 -.0006496 .108927 -0.01 0.995 -.2286365 Tertiary education level .1900042 .0670932 2.83 0.011 .0495766 Broadband penetration .0177989 .0061606 2.89 0.009 .0049046 Constant 7.989611 4.063328 1.97 0.064 -.5150321 Number of 24 observations F(4,14) 14.34 Prob>F 0.0000 R2 0.4311 Root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he Impact of Taxation on the Development of the Mobile Broadband Sector 'DWDVHWXWLOL]HGIRUPRGHOVSHFLÀFDWLRQ $ Countrycode GDP per capita Investment GrowthGDP Education BBpen ATG 66.2797 8.9403 ARG 7702.89 20.6923 16.5867 61.1355 107.823 ABW 20502.1 28.2821 387.313 BHS 16506.7 29.3046 4.3506 24 15.5457 BRB 10168 20.1008 5.5318 37.2433 8.1841 BLZ 3329.86 18.6054 5.521 1.93629 194.065 BOL 1009.76 13.5399 14.8069 38.2594 49.0383 BRA 3701.47 16.7093 18.9152 20.1332 222.64 CYM 18.8224 CHL 4880.05 21.0708 12.0877 41.0088 34.5049 COL 2364.27 23.1895 19.9581 24.0214 94.2288 CRI 4058.86 20.4167 9.9618 18.9653 84.3765 CUB 27.8023 DMA 3802.05 27.4794 5.0248 10.72 22.9353 DOM 2744.36 17.1358 16.2107 34.0052 144.656 ECU 1295.48 21.5539 11.6646 26 66.1192 SLV 2209.16 16.5201 9.8179 17.4876 49.0833 GRD 4078.75 50.4495 8.4024 4.5791246 GTM 1717.86 19.3484 10.2256 9.51231 GUY 942.36 24.7934 8.0225 6.51219 HTI 448.932 28.3518 13.1886 1 HND 1146.87 27.2208 9.8352 17.259 JAM 3479.06 10.1887 19.1449 197.798 MEX 5934.98 20.3829 7.4992 21.7426 144.245 ANT 21.242 NIC 770.589 27.4293 7.3006 17.8016 12.1392 PAN 3939.22 18.8851 10.2418 42.6653 9.3827 PRY 1322.65 18.666 18.1138 25.9625 498.308 PER 2049.3 20.1453 12.8428 31.9533 139.23 PRI 16003.7 58.0852 KNA 7441.03 44.0985 6.5369 2.1776316 117.188 LCA 4224.21 25.2008 5.4352 12.8799 168.86 VCT 3102.43 32.4618 7.6686 5.665548 14.9604 SUR 1909.75 23.4107 21.8914 12.4278 91.9079 TTO 6269.92 16.7421 14.3111 8.36397 377.199 URY 6914.36 16.2452 19.4821 35 VEN 4818.71 19.8794 23.2786 37.8436 76.5741 53 The Impact of Taxation on the Development of the Mobile Broadband Sector E. Economic impact model assumptions Mexico Malaysia Brazil Bangladesh South Africa GDP (2009) (billion) 1,143 212 1,623 82 276 Estimated GDP growth (2010-2014) 3.5% 3.8% 4.5% 7.2% 3.5% Population (2009) 110.6 27.5 192.3 159.2 49.3 Population growth (2010-2014) 1.0% 1.9% 1.2% 2.0% 1.0% Handset price (2009) 155 165 251 172 171 Cost of services (annual, 2009) 285 229 471 198 249 TCO (2009, including taxes) 347 295 571 267 301 Taxes on TCO 16.0% 6.1% 43.3% 54.8% 14.9% Mobile broadband penetration (2009) 2.9% 13.1% 3.1% 0% 8.0% Mobile broadband penetration (2014) 10.0% 30.4% 12.0% 4.1% (see note) 22.4% (base case) Mobile broadband users (2009, millions) 3.2 3.6 5.9 0 4.0 Mobile broadband users (2014, millions) 11.6 9.2 24.8 7.1 (see note) 11.6 (base case) Estimated average growth of mobile 29.5% 20.6% 33.3% * 23.4% broadband (2009-2014) Notes: 1. There is no fixed date for the launch of 3G services in Bangladesh. The model estimates the impact in Bangladesh assuming a 5 year period after services are first offered, basing the calculations on the macroeconomic numbers of the period 2009-2014. The longer the launch is delayed, the higher the impact will be, as most likely GDP will be higher on year 0 and prices will be lower than the ones assumed in this exercise. To avoid additional assumptions, the decrease in handset price was assumed to be similar than in the rest of the countries studied. Conservatively, it was assumed that the cost of service did not decrease in the 5 year period, though its initial level was only 50% of the lowest cost of service assumed for other countries, reflecting current average prices (in nominal terms, as opposed to estimating PPP). 2. GDP is expressed in nominal USD billion. Price of handset, cost of service and TCO in is USD calculated at 2009 average exchange rates. 3. Prices of handsets were assumed to decrease 5.9% per year in all cases. 4. The cost of service was assumed to decrease each year by 4.3%, 8.9%, 9.7%, 0%, and 7.3% in Mexico, Malaysia, Brazil, Bangladesh (see Note 1), and South Africa respectively. 5. “TCO” (Total cost of ownership) is the sum of the cost of the annual service plus the amortization of the handset cost over a certain period. It was assumed it was amortized on average over a 26.8 month period in all cases (30 months in 2009). TCO includes taxes levied on services and handsets. 6. “Taxes on TCO” is the average taxes paid on services and on the amortization of the handset. For Brazil, which charges taxes on overall revenue, the “Taxes on TCO” was calculated in such a way as to make this percentage comparable to the rest of the case studies. In Brazil, certain other levies (FUST, FUNDTEL, and others) were not considered. 7. Mobile broadband penetration (2014) (base case) is the forecast assuming no changes in taxation. The estimation was based on existing forecasts (Telegeography, Wireless Intelligence, Pyramid, government reports, others) and were adjusted with adoption trends for fixed broadband and basic wireless penetrations observed in those countries in the past. 8. Monthly churn was assumed to be 3% in all cases. It was assumed that one third of these cases implied a handset replacement. 54 The Impact of Taxation on the Development of the Mobile Broadband Sector Disclaimer on the assumptions and the methodology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ase case 1 p.p. of additional 10 p.p. of additional penetration in 2014 penetration in 2014 Penetration (2009) 8.0% 8.0% 8.0% Penetration (2014) 22.4% 23.4% 32.4% Users (2009) 4.0 4.0 4.0 Users (2014) 11.6 12.1 16.8 Most conservative scenario (penetration elasticity: 0.6, GDP elasticity: 0.17) Additional GDP 138 139 148 Additional tax revenue (37) (39) (53) Accumulated return 1.87 1.84 1.60 Additional users 0.307 0.320 0.443 Additional penetration (p.p.) 0.591 0.617 0.855 Most aggressive scenario (penetration elasticity: 1.2; GDP elasticity: 1.38) Additional GDP 1,342 1,387 1,787 Additional tax revenue 303 314 409 Accumulated return 24.9 25.2 27.1 Additional users 0.620 0.646 0.895 Additional penetration (p.p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ÀFDQWO\ *'3LV WR 0086'KLJKHURQ -#+#'0,3#$ +"#$ 1(315&),(37$ !"#$ 1',+,1/5$ #)+,0/+,(3$ ,)$ +"#$0()+$1(3)#'4/+,4#$/3-$0()+$/88'#)),4#$)1#3/',()$ WKHGLIIHUHQFHEHWZHHQWKHSHQHWUDWLRQLQWKHFRQWH[W '#)%#1+,4#5.7$ !"#$ /--,+,(3/5$ %#3#+'/+,(3$ (4#'$ +"#$ RIDORZHUWD[UDWHDQGWKDWRIWKHVWDWXVTXR DVVXPHGEDVHZDVHVWLPDWHGWREHRQO\WR SS WR PLOOLRQDGGLWLRQDOXVHUVLQVWHDG RI 55 The Impact of Taxation on the Development of the Mobile Broadband Sector F. Bibliography $7.HDUQH\ $VLD3DFLÀF0RELOH2EVHUYDWRU\5HSRUW&RPPLVVLRQHGE\WKH*60$VVRFLDWLRQ &UDQGDOO5/HKU:/LWWDQ5 7KH(IIHFWVRI%URDGEDQG'HSOR\PHQWRQ2XWSXWDQG(PSOR\PHQW $&URVV VHFWLRQDO$QDO\VLVRI86'DWD7KH%URRNLQJV,QWLWXWLRQ:RUNLQJSDSHU-XO\ 'HORLWWH 6)7),$-#!)#.!,9&!:'-;,9!-<'$0)5HSRUWFRPPLVVLRQHGE\WKH*60$VVRFLDWLRQ 'HORLWWH *OREDO0RELOH7D[5HYLHZ5HSRUWFRPPLVVLRQHGE\WKH*60$VVRFLDWLRQ )ORUHV5RX[(UQHVWR 0DULVFDO-XGLWK 3URSXHVWDGHOLFLWDFLyQGHOD)LEUD2VFXUDSURSLHGDGGHOD&)( 6ROXFLyQ TXHJHQHUDHVFDVH]DUWLÀFLDOWDQWRSUHVHQWHFRPRIXWXUD',56,²7HOHFRP&,'($YDLODEOHRQOLQHDW KWWS GLUVLQHWVLWHVGHIDXOWÀOHV',56,B B0$57$B0(;B/LFLWDFLyQÀ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pULFD/DWLQDDORV5HWRV(FRQyPLFRV$FWXDOHV7$ %DUFHORQD (GLWRULDO$ULHO .DW]5 G 7KHHFRQRPLFDQGVRFLDOLPSDFWRIWHOHFRPPXQLFDWLRQVRXWSXW DWKHRUHWLFDOIUDPHZRUNDQG HPSLULFDOHYLGHQFHIRU6SDLQ@#,&'&0-#-1$0(YROXPH²1XPEHU²-DQXDU\)HEUXDU\ .DW]5DQG6XWHU6 =(,$1),$#:!69&!=0-#-1$0!@1/)0,!- *DOSHUtQ+DQG.DW]5 $QiOLVLVGHO,PSDFWRHFRQyPLFR\VRFLDOGHOSUR\HFWRGHOH\GHH[WHQVLyQGHLPSXHVWRV LQWHUQRVDSURGXFWRVWHFQROyJLFRV\GHLQIRUPiWLFD\GHFUHWR :RUNLQJ3DSHUQR8QLYHUVLGDGGH6DQ$QGUpV &HQWURGH7HFQRORJtD\6RFLHGDG .DW]569DWHUODXV3=HQKlXVHUQDQG66XWHU ´7KH,PSDFWRI%URDGEDQGRQ-REVDQGWKH*HUPDQ (FRQRP\µ@#,&'&0-#-1$0(9ROXPH²1XPEHU²-DQXDU\)HEUXDU\ .DW] 5 (O LPSDFWR HFRQyPLFR GH ODV 7,& HQ $PpULFD /DWLQD &RQIHUHQFLD GH 3UHQVD HQ OD 5HXQLyQ GH *REHUQDGRUHVGHOEDQFR,QWHUDPHULFDQRGH'HVDUUROOR&DQF~Q0H[LFR0DU]R .RXWURXPSLV 7KH(FRQRPLF,PSDFWRI%URDGEDQGRQ*URZWK $VLPXOWDQHRXVDSSURDFK6&*&0-11"#$0),$-#(! 3ROLF\9ROXPH,VVXH 2FWREHUSS 56 The Impact of Taxation on the Development of the Mobile Broadband Sector /DIIRQW-- 5HJXODWLRQDQGGHYHORSPHQW&DPEULGJH(QJODQG &DPEULGJH8QLYHUVLW\3UHVV /HKU:2VRULR&*LOOHWW66LUEX0 0HDVXULQJEURDGEDQGHFRQRPLFLPSDFW3DSHUSUHVHQWHGDWWKHUG 5HVHDUFK&RQIHUHQFHRQ&RPPXQLFDWLRQV,QIRUPDWLRQDQG,QWHUQHW3ROLF\6HSWHPEHU$UOLQJWRQ9D 0DULVFDO-DQG)ORUHV( 6&*&0-1"#$0)0$-#&(4!5&'%$0$-(!0-#!&<&0,-(!/-($,$%-(!/)')!&#<'&#,)'!*)!0'$($(:RUNLQJ SDSHUSUHSDUHGE\7HOHFRP&,'(\',56,UHJDUGLQJWKHLPSDFWRI,(36WD[SURSRVDOIRUWHOHFRPPXQLFDWLRQV )#'4,1#)7 0DULVFDO-DQG5DPtUH]) ´5HWRVSDUDHO'HVDUUROORGHO6HFWRUGHODV7HOHFRPXQLFDFLRQHVHQ0p[LFRµ :RUNLQJ3DSHU'$3²&,'(0p[LFR 4LDQJ&.KDOLO0'RQJLHU3 ,QIRUPDWLRQDQG&RPPXQLFDWLRQIRUGHYHORSPHQW:DVKLQJWRQ'& 7KH :RUOG%DQN 6KLGHOHU'%DGDV\DQ17D\ORU/ 7KH(FRQRPLF,PSDFWRI%URDGEDQG'HSOR\PHQWLQ.HQWXFN\3UHVHQWDWLRQ DWWKH7HOHFRPPXQLFDWLRQ3ROLF\5HVHDUFK&RQIHUHQFH:DVKLQJWRQ'&6HSWHPEHU :DYHUPDQ/0HVFKL0)XVV0 7KH,PSDFWRI7HOHFRPVRQ(FRQRPLF*URZWKLQ'HYHORSLQJ&RXQWULHV7$ :RUNLQJSDSHURI/RQGRQ%XVLQHVV6FKRRO 57 GSMA Head Office: Tel: +44 (0)207 356 0600 Fax: +44 (0)207 356 0601 Email: mbb@gsm.org 7EB WWWGSMWORLDCOMMBB