Monday, January 21, 2013

Mobile Charge Card Prices Go Up

It wasn't long ago when Mr. Morsi rolled out his proposed tax hikes to secure the future of the IMF loan to Egypt. Included among these proposed tax hikes was a dramatic increase in the cost of 'commodities,' which included cigarettes, sheisha, alcohol, and the charge cards and lines for mobile phones.

For anyone who went to re-charge with Vodafone yesterday, you may have been met with a shock at the increase in the price. I know if I walk into a Kiosk and ask for a Vodafone card for 50 LE, and they try to charge me 55 LE, I always assume that the Kiosk is charging a 'tax' on the cards for their own services. Now however, the overall cost of mobile phone charge cards with Vodafone has gone up...a whopping 15%.

These charges are not exclusive to Vodafone, Etisalat and Mobinil will also be increasing their prices. The Egyptian Ministry of Finance has denied reports that the price increase is a result of Mr. Morsi's tax hikes, which specified a minimum of 3% up to a maximum of 18% increase in the telecommunications sector. These blanket hikes will also fall to industries such as electricity and power, water, and so on.

There are, however, concerns that these increases will negatively impact the mobile phone operators. Ihab Said, of the Egyptian Chamber of Commerce, was quoted saying that these increases are expected to cause drops in the sale of mobile cards by "not less" than 30%. Dr. Amr Badawi, the head of the National Telecommunications Regulatory Authority has said to try to avoid any declines in sales, the increased costs in mobile phone cards must be offset by "attractive offers" and better performance in the providers' service.

Egyptians are already in uproar about the increase in prices. With a flailing economy, unemployment on the rise, and salaries not keeping up with the rising costs, calls for a boycott of the three main mobile providers have already begun. In 2011, Vodafone, Etisalat, and Mobinil all suspended their mobile phone services on January 28th, in the midst of the revolution. Activists believe that this day and the suspension of all phone services resulted in many lives that could have been saved. In a symbolic gesture, activists have launched appeals for a boycott of the mobile providers on January 28th of this year.

From their Facebook page, they ask: No phone calls unless absolutely necessary (so-called emergency calls), no balance transfers, no purchase of scratch cards, no access to the service provider's internet page.

Having already boycotted Google with little to no effect, it will be interesting to see how these planned boycotts play out. Of course, being that they are scheduled to come after the 25th, we could be talking about an entirely different ball-game by that time.


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