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Vodafone Qatar

Vodafone Qatar

July 18 12pm: This story was updated to add a new statement from Vodafone Qatar

A government body has launched an inquiry after Vodafone Qatar customers were left without service for more than 18 hours yesterday.

Vodafone’s network was partially restored on Monday evening and the company said it had been working through the night to bring it fully up to speed today.

In a statement released to the public on Twitter this morning, the company apologised for its “brief communication” with customers yesterday due to “rapidly unfolding” events.

It added that network engineers from the company’s “global partners” had flown into Qatar in try to restore full service more quickly.

Compensation promise

In a series of tweets, Vodafone Qatar also said that it now had a “compensation plan” in place:

The company now has three days to send a detailed investigation report to the Communications Regulatory Authority (CRA).

In a statement yesterday, the CRA added that Vodafone is “bound by its license to provide customers with appropriate compensation for this disruption of service.”

Outrage

According to Vodafone, its network went down due to “technical issues” following a “routine upgrade” early Monday morning.

The telecom provider did give an accurate timeframe for when its network would be restored, however.

This lack of communication irked many of its 1.5 million customers. Some have even threatened to switch to competitor Ooredoo.

Vodafone now has until July 20 to tell the CRA:

  • What caused the outage;
  • To what extent it affected customers;
  • What steps were taken to resolve the issue; and
  • What measures will be put in place to prevent such outages from happening again.

Thoughts?

Photo for illustrative purposes only.

GotCredit / Flickr

Photo for illustrative purposes only.

Qatar is the least likely of its regional peers to begin levying new taxes on residents and businesses, representatives from several major accounting firms have said.

The prediction was made during a meeting in Dubai this month of the Institute of Chartered Accountants in England and Wales, and comes as Qatar’s government explores new revenue sources amid persistently low prices for its oil and gas.

Speakers at the conference also suggested a value-added tax (VAT) of between 3 and 5 percent could be introduced “in the near future” in Oman and the UAE. With the rest of the GCC countries in various stages of preparation, other governments could follow.

However, the panelists – which included executives from global consulting firms KPMG and PwC – said “Qatar is unlikely to introduce taxes at this stage.”

Vodafone Qatar CEO Kyle Whitehill

Vodafone Qatar

Vodafone Qatar CEO Kyle Whitehill

Nevertheless, the prospect of new government levies has already prompted the CEO of Qatar’s second-largest telecom firm to warn that any new taxes could have a “destabilizing” effect on the country’s economy and turn expats off from moving to the Gulf state.

While the suggestion has the support of many economists and even some residents, Vodafone Qatar CEO Kyle Whitehill said it would be problematic for a country that already has a high cost of living.

Speaking to Bloomberg Businessweek Middle East, Whitehill said:

“The big implication is around the cost of the employee and equipment. It’s such a high-cost country that attracting an employee to come work and live here hugely inflates the cost of the employee versus any other country.”

Whitehill told the magazine that many expats are drawn to Qatar because of its tax-free status, but are taken aback by the price of daily items once they arrive.

“You go to get a coffee in Dubai or Doha and you have to reach for your platinum express card,” he said. “A (value-added tax) on top of that could have a destabilizing effect.”

What’s happening

Dr. Saleh bin Mohammed Al Nabit - Minister of Development Planning and Statistics

Hilalyazbek/Wikicommons

Dr. Saleh bin Mohammed Al Nabit – Minister of Development Planning and Statistics

While the government has not officially said that new taxes are being considered, there are signs that the concept is at least being debated.

Last week, Saleh bin Mohammed Al Nabit, who leads Qatar’s Ministry of Development Planning and Statistics, said it had become “urgent” to both reform the country’s generous subsidies as well as develop the tax system to support “the revenue side of the budget.”

Al Nabit did not say whether he was referring to an increase in Qatar’s current 10 percent corporate tax rate, or the introduction of a new sales or personal income tax.

Some residents have said they are open to the idea, providing the government is transparent about its finances:

Others were less enthusiastic and predicted some expats would leave Qatar if a new tax hit their personal finances hard, while some worried that companies would have layoffs to deal with the added costs.

GCC debate

After discussing it for years, GCC governments reportedly resuscitated the idea of simultaneously introducing a value-added tax (VAT) across all six countries.

While no timeline was attached to this latest initiative, previous predictions that a value-added tax would start being applied to transactions in the region by 2012 or, more recently, 2015, have failed to materialize.

For illustrative purposes only.

Michael Allen Smith / Flickr

For illustrative purposes only.

Besides being the type of tax that’s least likely to harm the Gulf region’s brand as a tax-free haven for expats, consulting firm Deloitte said earlier this year that VATs are popular among governments because they are considered to be more efficient, cheaper to operate, less open to fraud and less likely to distort investment decisions by businesses than other forms of taxes.

The company added that Gulf states want to coordinate their actions out of fear that the first countries to introduce a VAT would be at an economic disadvantage, because consumers and businesses would turn to neighboring countries for their purchases.

Thoughts?

In a blow to Qatar’s main mobile service provider, Qtel must shut down all Qtel Virgin Mobile-branded services, the country’s telecommunications regulatory authority, ictQatar, has ruled.

All Virgin-branded SIM cards must be deactivated by Aug. 4, ictQatar confirmed on Monday in a statement on its website.

In its ruling, the authority said it found that:

1) Qtel Virgin Mobile services were marketed to the public by Qtel in a manner that was misleading or deceptive

2) Qtel had engaged in anti-competitive conduct and an abuse of dominance

3) Qtel failed to comply with orders and instructions ictQatar had issued to Qtel to correct its conduct concerning the marketing of its Qtel Virgin Mobile services.

Qtel is required to transfer all Virgin customers to a similar Qtel service or provide a cash refund for the value of their SIM cards (QR35) and any credit balance in their accounts.

Qtel should communicate full details to customers in the next few days, ictQatar said.

Last July, following a complaint from Vodafone Qatar, ictQatar ruled that Qtel broke the law when it partnered with Virgin Mobile to offer mobile telephone services.

Qtel at the time said it would continue operating with a few changes to its marketing strategy. But ictQatar has ruled the tweaks were not enough.

Read ictQatar’s full statement here.

Arabian Business reports that Virgin boss Sir Richard Branson said he was planning to expand his Virgin Mobile brand across the Arab world, with the UAE being targeted for new services. 

UPDATE: In a press statement, Qtel said it intends to “comply fully” with ictQatar’s ruling. It also said it will migrate existing Virgin customers to Qtel’s Hala service, which will allow them to keep their mobile numbers and credit balances.

Customers must visit a Qtel outlet to swap their existing Virgin-branded SIM cards for a replacement Hala SIM card. Or they can opt for a full refund.