Research Notes

Long live equal rights

There is no doubt that the telco industry has been at the receiving end of an aggressive taxation in a number of countries and that the 3G auctions that were held around Europe around the year 2000 clearly document what happens when you tax an individual technology.

In the world we live in, many believe that politicians should have a neutral attitude towards the telco industry and not discriminate one technology in favour of another. It ought to be the customers that choose which broadband technology they would prefer to use.

We can see that the many technologies that can be used for broadband (copper, coax, fibre and mobile solutions) are resulting in the different technologies and companies experiencing tough competition, but at the same time a competition that benefits consumers and especially society.

But perhaps politicians are finding it difficult to grasp the many different technologies, the interests of different companies and especially how this market will develop in the future? On the other hand it could be entertaining to take a closer look at how the politicians are taxing the mobile industry and compare that to how they are taxing other areas of the telco industry. Basically the situation is that:

1.    Mobile operators purchase and pay for their mobile licences.
2.    A mobile licence has a time limit regarding how long it can be used by mobile operator.
3.    Mobile operators pay rent to install mobile antennas on publicly owned buildings.
4.    When a mobile company installs an electronics box on public ground, they pay rent.
5.    When telcos lay cables in public ground, they do not pay rent. 

Based on the above one could be tempted to ask why one broadband technology is being discriminated compared to another technology? Would it not be an idea for the political system to view the different technologies from a technology neutral viewpoint?

They could for example:
1.    Hold an auction to sell the rights to deliver broadband via fibre and other cable technologies.
2.    Ensure that laying cables in public soil has a time limitation.
3.    Launch a tax per kilometre for cables that have been laid in public soil and those that will be laid in the future.

The fact of the matter is that the politicians have decided to tax different broadband technologies in different ways, resulting in society today having very tough taxation on the technologies that are developing the fastest and that have the largest investments – which are the wireless technologies, while at the same time indirectly giving state subsidies to those that choose to dig their cable-based broadband solutions in the ground.

However, Strand Consult does not believe in taxing telco cables in the ground, but we do believe it is high time that the broadband industry is viewed from a technologically neutral angle and that politicians start realising that the telco industry is one of the most important industries in a modern society.

Having access to advanced telecom communication is just as important as having access to schools and universities. We have no reason to believe that politicians will start taxing education or the right to run private schools – but this is exactly what they are doing in the telco area.

We hope there will be a serious debate based on what the telco industry can do for society, rather than a debate on how to tax the telco industry. Strand Consult believes that the telco industry needs to work on improving their dialogue with the political system and we also believe that politicians should examine more closely how they can take advantage of the telco industry to develop modern society.

One thing is certain, and that is that the telco industry is the foundation of modern society and also the industry that probably can do most for the environment.
More information: Successfull strategies for the mobile broadband market

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