The Ministry of Finance and Budget in the Central African Republic has taken decisive action against Telecel Central African Republic by closing its offices due to the company’s failure to settle a substantial tax debt of approximately $4.4 million.
Reports have surfaced indicating that Telecel has not demonstrated a willingness to comply with the government’s 7% tax on final calls, a requirement introduced in the 2023 finance law. Since the implementation of this law in February 2024, Telecel has accumulated an outstanding amount of 689 million CFA francs ($1,136,835) in unpaid bills, contributing to a total tax liability of around 2 billion CFA francs ($3,299,958).
There is growing concern that Telecel’s inability to resolve this tax issue could have adverse effects on the quality and accessibility of its telecommunications services in the Central African Republic.
In a contrasting development, Telecel Central Africa laid the foundation for its new headquarters in Bangui, the nation’s capital, in May 2024. The building was envisioned to be a modern facility serving as the epicenter for Telecel’s regional operations. Malek Atrissi, the Chairman of the Board of Directors of Telecel Centrafrique, highlighted the company’s pioneering role in introducing fibre optics to the CAR and spoke of ushering in a new era of innovation and digitalization in the country.
Telecel faces competition in the Central African Republic from other telecom operators such as Orange, Moov Africa, and Socatel.
Beyond the Central African Republic, Telecel’s operations span across Gabon, Equatorial Guinea, the Democratic Republic of the Congo, and Chad, with a customer base exceeding six million active users. The company expanded its footprint in the West and Central African markets after acquiring two of MTN’s operations in the region through a sale and purchase agreement in December 2023.
In addition to facing tax-related challenges, Telecel Group has managed to secure a financial boost for its expansion efforts in West Africa. In February 2024, the group obtained a $20 million investment from the Africa Credit Opportunities Fund (ACOF) to enhance its operational capabilities in the region. In a related development, Vodafone Ghana underwent a rebranding process to become Telecel Ghana following its acquisition by the telecom company.
On the other hand, Telecel’s competitor Orange found itself in a tax predicament of its own. In April 2024, the government reportedly took issue with Orange after the company raised transaction fees on its mobile money platform, a move attributed to the imposition of a new 1% tax on such transactions.
These telecom companies are vying for a larger slice of the market share in an industry where total telecom service revenue was estimated at $101.7 million in 2022. According to a recent report, the market is anticipated to experience a growth of over 10% from 2022 to 2027.
The report suggests that this market expansion will be driven by an increased uptake of 3G services, a forecasted rise in the adoption of 4G services, and the expansion of fixed broadband services. These growth factors are expected to be supported by the government’s commitment to extending fibre network infrastructure and enhancing overall connectivity across the region.
