[Namibia] MTC clarifies subscription charges spike
MTC recently announced a subscription average increase of 7 per cent on both pre-paid and post-paid.
On pre-paid, the average subscription increase is on certain Aweh products only and will be effective 1st June 2017 while effective 1st July for certain products on post-paid which includes increases on Select, Netman, Mobiz and data bundles.
Chief Human Capital and Corporate Affairs Officer at MTC, Tim Ekandjo explains that the increase was necessitated by the increasing cost of doing business, particularly the depreciating N$ over the years and inflation rate increases from 6.7 in 2006 to 8% in 2007. He explains that MTC applied for a tariff increase in terms of section 53(7) of the Communications Act on the 10th February 2017 and complied with all the requirements in terms of the Act.
CRAN published the tariff in the Government gazette on the 13th March 2017 (Gazette number 6261) in terms of the regulations dealing with the submission of Interconnect Agreements and Tariffs and the purpose of the publication was to seek public comments on the submitted tariff increase. “I can confirm that no objections were received from the public and MTC received CRAN’s approval on the 27th April 2017 for tariff implementation effective 1st May 2017, MTC however deemed it necessary to delay the increases with another month to give ourselves time to inform our customers first.
“We have taken note of the complaints and concerns from our beloved customers and would like to assure them that there is nothing sinister about the increase. MTC has not had an increase for the past 11 years, and we like any other business operate within a very turbulent business environment affected by so many external factors beyond our control. Eight years ago it costed us just over N$600k to erect one tower in an urban area, today it cost us anything between N$1.5m and N$2.5m to do same because of the ever rising cost of steel, labour, power, rentals etc. It is indeed applaudable for MTC to have absorbed cost afflicted by external factors for the past 11 years without proposing an increase, I think that is a clear indication that MTC is very mindful of its customers,” said Ekandjo.
MTC is a very responsible corporate citizen, that subscribe to very genuine values of transparency and integrity, and we will never in any way rip of the very customers that make our business because our customers are our primary shareholders. MTC is a successful Namibian story, we have so far contributed over N$4.5 billion in dividends to the Namibian government, money that goes back to developing the economy of Namibia, paid over N$4.2 billion in taxes to government, a total investment of over N$3.7 billion in infrastructure and over N$350 million in sponsorship and social corporate investment.
In the next 3 years, we are rolling out further investments on the network of over N$1.7 billion and at some point we would have to balance cost. Our Osmartphone roll out allowed us to subsidise cost of over N$2.5 million on behalf of our customers to make smartphones more affordable and accessible. “We have noted all comments and concerns around the average 7% increase and would like to clarify the following.
This is not a 7% increase, but an average of 7% increase on certain products, and we would like to refer our customers to the MTC website to verify the exact increases. Secondly, the VAT charged on recharge vouchers did not increase. VAT is set and determined by the Ministry of Finance and MTC does not benefit anything from the VAT charged on recharge vouchers.
This was a decision taken by the Ministry of Finance Inland Revenue Services in 2008 to impose a 15% VAT on all prepaid airtime to all Telecommunications operators. MTC is not the only operator charging VAT on recharges. As for the network concerns, we encourage customers to give us continuous feedback where they experience either slow or poor network so that we can address those concerns.
The biggest concern raised was the disappearing data. You would recall that we ran a massive educational campaign on why data is depleted faster, and gave our customers tips on what they can do to save their data. We will continue to educate our customers because their interest is our interest”, concluded Ekandjo.