AMMAN — In response to recent media publications
discussing the Telecommunications Authority, and its declining prosperity and
rising prices due to government mismanagement, the authority issued the
following statement denying much of what they deem to be the spread of false
information. Here are the key passages from the statement:
اضافة اعلان
The Telecommunications Regulatory Commission (TRC) has been monitoring what has recently been circulated through various media outlets,
mostly news websites, including news reports and economic analyses related to
telecommunications issues. These reports often quoted statements attributed to
private sector officials (mobile phone companies) without referring to the
relevant government authorities to obtain their official statements and to
verify the information.
“The Authority confirms that the government
taxes borne by these companies do not exceed 6.5 percent of their total
revenues, as per their audited annual accounts for the year 2022.”
Some recent statements attributed to mobile
phone companies, suggesting that these companies pay JD0.70 to the government
for every Jordanian dinar earned from services, are not accurate and do not
reflect the reality of the situation. The tables below show the value of taxes
paid by the end-user and the taxes paid by the companies. Table (1) indicates
that the total taxes paid by the end-user for voice and data services combined
do not exceed 31 percent when purchasing the service directly from the company.
As for the tax imposed on internet services, it does not exceed 16 percent
because it benefits from tax support and exemptions aimed at promoting the
expansion policy and supporting various vital sectors.
Regarding the taxes paid by mobile phone
companies, the Authority confirms that the government taxes borne by these
companies do not exceed 6.5 percent of their total revenues, as per their
audited annual accounts for the year 2022. This percentage is minimal compared
to the total revenues generated by mobile phone companies in 2022, as shown in
Table (2) below.
There is no doubt that the Authority has
contributed more than JD2.1 billion to the treasury since its establishment
until the end of last year. However, news reports and economic analyses have
overlooked or perhaps ignored the fact that more than 51 percent of these
revenues were obtained through acquiring the scarce and limited national
frequency spectrum, which is essential for providing mobile communication
services. It is not considered revenue earned from companies but an investment
made by them to enable them to provide their services. The frequency spectrum
is undoubtedly one of the most important components for providing mobile
communication services.
When the Telecommunications Regulatory
Authority granted these frequencies to companies, it followed the latest
international standards and criteria for pricing the national resource, in line
with the policy and direction of successive governments to preserve the
interests of all three parties: maintaining and enhancing investment, providing
the necessary regulatory environment for its growth and prosperity, and
protecting the rights of consumers while ensuring high-quality services and
achieving reasonable and rewarding returns from the rare national resource
(frequencies).
The noticeable improvement in the
operational performance of all telecommunications companies and their adoption
of modern technologies did not happen by chance. It resulted from the
Authority's commitment to creating a collaborative environment, with the
blessing of His Majesty King Abdullah II bin Al-Hussein, and the support of
successive governments for the telecommunications and information technology
sector. The Authority has consistently provided incentives and facilitations to
operators (telecommunications companies), including:
A stimulus package was introduced in the
middle of last year to encourage the rapid introduction of 5G services in the
Kingdom. Companies were granted preferential prices for frequencies considered
a national resource, and they were exempted from the annual frequency fees
cumulatively for three years.
Licenses for companies were extended for
nearly double their original duration, which is one of the most cost-effective
and efficient methods to increase the capacity of telecommunications networks
and reduce the financial burden on operators.
Companies were exempted from the general
sales tax and customs duties on the infrastructure components, devices, and
equipment specific to 5G networks.
This comprehensive approach, combining
regulatory and investment incentives, has contributed to the remarkable growth
and development of the telecommunications sector in Jordan.
“News reports and economic analyses have overlooked or perhaps ignored the fact that more than 51 percent of these revenues were obtained through acquiring the scarce and limited national frequency spectrum, which is essential for providing mobile communication services.”
Media reports and economic analyses have
indicated that this sector provides communication services at the lowest
possible prices, if not the third lowest in the world. It's important to note
objectively and honestly that the price war policy adopted by
telecommunications companies in the last decade led to a decrease in service
prices without government intervention. Despite adopting this approach, the
companies' revenues have grown reasonably over the past three years, exceeding
JD722 million for the mobile telecommunications sector last year, with a growth
rate of about 7 percent compared to 2021. This has positively affected the
sector's annual investment volume, which has grown cumulatively by 15 percent
annually, confirming the sector's growth despite the price war.
On the other hand, one of the many tasks
and responsibilities of the Authority is to regulate telecommunications and
information technology services in the Kingdom to ensure the provision of
high-quality telecommunications and information technology services at
reasonable prices. This ensures the protection of users' interests, encourages
competition in the sector based on market forces, and ensures that regulation
is sufficient and effective to prevent and limit unfair competition or prevent
any company from abusing its dominant position in the market. Necessary
measures are taken for these purposes to ensure a stable regulatory environment
that encourages investment.
It should be noted that the simultaneous
announcement by the three mobile phone companies of raising the prices of some
of their prepaid line services without giving subscribers a choice between
continuing with the old offers or switching to the new ones may constitute if
proven, a violation of Jordanian Competition Law No. (33) of 2004 and its
amendments, which prohibit such practices. This prompted the Ministry of
Industry and Trade Directorate to intervene and send letters to the mobile
telecommunications companies regarding this decision, which also violates the
Competition Protection Instructions in the telecommunications sector issued by
the Authority. These interventions aim to prevent any practice that may disrupt
competition and harm the interests of users since it limits their choices.
In conclusion, the Telecommunications
Regulatory Authority is fully committed to communicating with all media
institutions, providing answers, and responding to inquiries. This is based on
the principle of conveying accurate and comprehensive information to citizens.
In return, it is essential for media institutions and their representatives to
conduct thorough research and seek information when preparing news stories.
They should also engage with relevant authorities and not solely pursue the
concept of breaking news that is not based on realistic facts and can create
confusion for everyone.
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