Sudan has scrapped a 30 per cent profit tax on telecom operators until end-2015, replacing it with a 2.5 per cent levy on total income, in a move that should help a sector hurt by the plunging value of the Sudanese pound.  

Sudan had the highest sales tax on mobile services in the Arab world, according to a recent report by Arab Advisors Group, deterring investment. 

Sudan’s decision, announced via the official Sudan News Agency (SUNA), reverses a government tax increase in December 2011, which raised sales taxes on telecom companies to 30 per cent from 20 per cent and a profit tax to 30 per cent from 15 per cent.

It is unclear whether the new 2.5 per cent tax on total income is in addition to, or replaces, the sales tax. 

Sudan’s three mobile operators – Zain Sudan, state-owned Sudani, and South Africa’s MTN – typically buy equipment in hard currency such as dollars or the euro, so the pound’s plunge has upped expenditure at a time when average revenue per user is in retreat. 

TeliaSonera has appointed Johan Dennelind to the position of president and CEO. He has almost 20 years of experience of the telecommunications industry, most recently with Vodacom Group where he held the position as CEO Vodacom International based in South Africa.

He started his telecom career as a trainee with Telia AB. Between 1999 and 2010 he held various positions in Telenor, including two years as CEO of Digi Telecommunications. He holds a Master of Science in Business Administration from the University of Örebro, Sweden. Johan was born in 1969.

In February, Lars Nyberg, former TeliaSonera CEO resigned after an external review of the Nordic operator group’s investments in Uzbekistan criticised how it obtained a mobile licence in 2007.

Etisalat Benin, a wholly owned subsidiary of Etisalat Group, has been awarded a universal service licence for the West African country. The concession gives Etisalat Benin the right to provide 3G and 4G services and any other mobile telecommunications technology that becomes available for the next 20 years.

Saudi retail investors face hefty losses after a royal decree ordered the liquidation of Saudi Integrated Telecom Co. (SITC), which floated its shares in an initial public offer (IPO) in 2011 but never commenced operations.

SITC’s failure highlights the dominance of speculative retail traders in the Saudi market, who chase rising prices with little regard for fundamental valuations.

The Capital Market Authority (CMA) bourse regulator halted trading in SITC’s shares on February 5 when the stock was trading at SAR24.35 (US$6.51), more than double the initial public offer price of SAR10 but half the all-time closing high of SAR50.50 hit in March 2012, which valued the company at 5.05 billion Saudi riyals ($1.35 billion).

However, some shareholders at least could be in line to receive a pay-out from the liquidation committee, which comprises the CMA, the ministry of commerce and the telecom regulator, as the company had 100 million shares in issue and reported net assets of SAR910 million at the end of 2012.

King Abdullah’s decree said that the company should be liquidated within six months and the priority in the repaying of its obligations is to its non-founder subscribers and shareholders.

The monarch ordered the company’s liquidation last month after promising in 2012 to ensure trading rules applied to everyone, including the ruling Al-Saud family. The company’s chairman is Prince Saud bin Khaled bin Abdullah Al Saud.

Prince Saud owned a 43 per cent stake in SITC as recently as last September, according to Thomson Reuters data. This was held through various holding companies and these and other founding shareholders made a winning bid in 2007 of SAR1 billion for a licence to provide fixed-line services.

The founding shareholders were to pay SAR650 million of this fee, with the other SAR350 million to be raised through an IPO and a five per cent stake sale to the state pension fund.

SITC concluded its IPO and listed in June 2011, despite still not receiving its telecom operating licence and recorded no revenue that year or in 2012, Thomson Reuters data shows.

The founding shareholders did not pay up for their part of the licence fee until January this year, according to a stock market filing, but the company told Reuters it had provided the regulator in the interim with a bank guarantee in lieu of immediate payment of the fee.

Zain Group has announced that in compliance with the provisions of its telecom licence in Iraq, Atheer Telecom Iraq (Zain Iraq) is required to offer at least 25 per cent of its shares on the Iraq Stock Exchange (ISX). To that end, Zain Iraq has taken the following steps:

1. Since only Iraqi-domiciled joint-stock companies can list on the ISX, Zain Iraq’s shareholders, led by Zain, are in the process of establishing a joint-stock company under the name of Al-Khatem Telecommunications Company (Al-Khatem).

2. The Iraq Companies Law requires that Al-Khatem invite the public to subscribe to the capital at the time of incorporation. As such, Al-Khatem is offering 55.9 million shares for subscription for a period of thirty days from June 4, 2013.

3. After completing this constituent public subscription process, and the fulfilment of other regulatory requirements, Al-Khatem expects to receive a final approval for incorporation from the Companies Registration Department. This will allow Al-Khatem to commence the necessary steps towards a subsequent offer of 25 per cent of its share capital on the ISX, subject to approval by the telecom and capital market regulatory authorities in Iraq.