Cellular networks raise rates in anticipation of new tax hikes

Daily News Egypt
3 Min Read

By Mohamed Alladin

In a surprise move for Egypt’s mobile market, Mobinil and Vodafone Egypt have raised the price of prepaid minute-cards beginning in 2013, in preparation for expected tax hikes on the country’s telecommunications networks. Both companies said they would raise the price of lines for wholesalers by five pounds, and pre-paid cards by 20 piastres, while Etisalat Egypt notified its distributors that it to would soon raise the price of its products.

Muhammad Talat, a distributor for Vodafone Egypt, said that the price of prepaid minute-cards in Egypt’s wholesale market had risen between 20 and 25 piastres, with their price at distribution outlets increasing as much as 40 over the last week.

He said that these price increases should not have an effect on consumers, however that some distributors have been exploiting the current state of market instability being witnessed in Egypt to raise the price of 10 pound cards to as much as 13.5.

He added that the price of mobile phones had increased after Mobinil and Vodafone Egypt raised their SIM card price to 15 pounds. He added that the latter had also got rid of its incentive policy for wholesalers that grants them 1 pound for every phone line they register. Instead, every three months they would grant distributors a 3% commission on the amounts paid by clients per phone line.

Talat added that the current economic situation has forced businesses to raise the price of phone lines by EGP 20 in order to compensate for recent price increases. He further went on to say that businesses were counting on the company’s newly proposed 3% commission rate to help rake in profits. On the other hand Etisalat Egypt adhered to the demands of their distributors to raise the wholesale price of their products beginning in 2013.

Hassan Abdullah, president of the Technical Office for Egypt’s Tax Authority, stated that none of the companies are entitled to any of the fees collected as a result of recent amendments to Egypt’s tax code, regardless as to whether or not they had already raised the price of their products or sought to do so in the future.

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