The Communications Regulatory Authority of Namibia has warned that delays in addressing its growing funding shortfall could force telecommunications regulatory levies to rise to 3.5% or higher in future, as the authority pushes for a proposed increase to 2.25% of industry turnover over the next five years.
The regulator said the proposed increase is aimed at recovering an estimated N$118 million under-recovery and ensuring the long-term sustainability of the communications sector regulator.
The proposal comes as the current 1% levy, introduced in 2021 following consultations with industry players, has failed to fully cover the actual cost of regulating the sector.
According to CRAN, the initial recommendation was for a 1.5% levy, but this was reduced after engagements with operators, resulting in continued financial shortfalls.
Speaking during the regulatory levy review process, CRAN Executive for Economics and Market Development Helene Vosloo said the authority recorded an under-recovery of around N$181 million over the past five years.
She said N$63 million linked to settlement agreements and payment arrangements with some licensees had already been excluded from the recoverable amount, leaving a net shortfall of approximately N$118 million.
“Turning to the financial position: the levy review covers the period from 2020 to 2021 onwards. The original budget assumptions were set during that period, but changes in the industry and implementation challenges resulted in delays and adjustments. Over this period, we recorded an under-recovery of approximately N$181 million. Following settlement agreements with certain licensees, N$63 million has been deducted, as some operators were unable to meet obligations. After adjustments, the total under-recovery over the five-year period stands at approximately N$118 million,” she said.
Vosloo said the proposed 2.25% levy is expected to generate around N$829 million over the next five years, slightly above the estimated N$823 million required to cover future regulatory costs and accumulated shortfalls.
She said any over-recovery would legally have to be returned to the industry, while future deficits would again need to be recovered through additional levy adjustments.
CRAN also proposed a lower 1.25% levy for broadcasting licensees due to weaker financial performance and declining revenues in the broadcasting sector compared to telecommunications operators.
“Broadcasting and telecommunications sectors were treated differently due to differing market conditions. Telecommunications revenues continue to grow, while broadcasting revenues are stagnating or declining. Postal services are also in decline globally,” Vosloo said.
She defended the move to replace the current glide-path methodology with a fixed percentage levy system, saying the model aligns with international best practice and would provide greater certainty for both the regulator and operators over the next five years.
Vosloo added that the new approach would reduce reliance on major operators such as Telecom Namibia, MTC and MultiChoice Namibia, which have historically carried a large portion of the sector’s regulatory costs.
CRAN warned that failure to implement corrective measures now could result in even steeper levy increases in future.
