Orange, Telekom, Vodafone urge government to cancel new taxes imposed on mobile communication services

Aurel Dragan 29/01/2019 | 13:05

The members of the Romanian Mobile Operators Association (AOMR) – Orange, Telekom and Vodafone Romania – have asked the Romanian government to cancel the provisions of the Emergency Ordinance 114/2018 due the fact that it will drain all the financial resources of the sector.

The Ordinance imposes an annual tax of 3 percent on the turnover of mobile operators, which they claim will disrupt the entire sector of electronic communication.

“The new taxes risk to unbalance a sector that so far has offered good quality services at very low prices compared with those on the European Union market,” states AOMR’s press release.

The statement also shows that the association has already warned authorities that the provisions violate the European norms, risking an infringement procedure.

The annual tax of 3 percent of turnover represents about EUR 100 million, money that will no longer be invested in the development of networks and new telecommunication services.

The tax also comes in a year when the mobile operators have to make significant expenses for the 5G spectrum licensing and start large-scale investments in 5G networks.

“At the same time, the minimum prices for 5G spectrum allocation were established by this Ordinance at an excessively high level, in contradiction with the provisions of the Directive 2002/20 / EC and much higher than in the other European countries,” shows the press release.

According to the Ordinance, the state should cash in around EUR 3.1 billion from the 5G licensing process this year, a sum that cannot b supported by the 4 big mobile operators on the market.

“Under the 5G National Strategy, the Romanian state should enter into a partnership with the sector private network to facilitate the expansion of fixed and mobile telecommunication networks, absolutely mandatory for successful 5G services. We note, however, that GEO 114/2018 contains provisions without precedent at European level, which introduces a regime of excessive sanctions as well discriminatory for telecoms companies than companies in other industries, discouraging thus extending and modernizing communications networks.

In conclusion, the measures imposed by GEO 114/2018 will exhaust the financial resources of the sector of mobile communications, to the detriment of the necessary investments for network development.

Considering all of the above-mentioned reasons we ask the Government to cancel the provisions of GEO 114/2018 on electronic communications.”

In the last 10 years, the total investment made by the members of AOMR is over EUR 5.5 billion and the payments to the state budget is around EUR 4.3 billion. Also, the total taxes paid to ANCOM, the sector authority, is close to EUR 700 million.

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