Though there has been an unprecedented boom in mobile phone proliferation in developing countries like China and India, the rest of the developing world is yet to wake up to the utility in popularizing mobile phones for social and economic development.



The prime reason for mobiles being not affordable, hence, not popular in developing countries is absurdly high taxes. This has held back 100s of millions of people from becoming mobile users thus impeding overall development of the countries concerned. This has been revealed by a study by the GSM Association (GSMA) which was conducted by Pyramid Research and Frontier Economics, with support from Deloitte & Touche LLP and Tarifica.



Besides this, the other factors are archaic telephony regulations and licensing procedures, some dating back to even 50 years and still in force. Then there is the dreaded bureaucratic red-tape in providing necessary licenses to mobile operators, device vendors, carriers.



So what can be done to counter this?



1. Governments should lower taxes obviously the first thing to do. According to the study, a government that lowered sales taxes on mobile services by just one percentage point would boost the number of mobile phone users in its country by more than 2% between 2006 and 2010. In the long term, lowering taxes on mobile communications could actually increase government’s total tax revenue. Each new mobile phone user would generate an additional US$25 a year in service tax revenues at the current levels of taxation on usage.



2. Eliminate all telecom-specific and other special taxes. This would boost the number of mobile users in the affected markets by 34 million by 2010 and mobile voice traffic in these markets by 25%.



3. Do away with archaic laws and regulations in telephony and sale of devices.



4. Minimum bureaucratic interference in the spread of mobile phone users.



5. Do away with the protectionist attitude of telecom regulators in countries.



6. Make the mobile telephony sector an open playing field for all those who want to have a slice of the market. Competition would further bring down prices and the ultimate winners would be not only the consumers, but the governments due to more expenditure on mobiles and even the mobile device vendors, carriers and all related to the mobile industry.



7. Government should actively encourage mobile usage because mobile communications really don’t need high spending on infrastructure as traditional fixed lines need.



We would like to hear about a few more suggestions from you.