Trend: Emerging markets stunted by high taxes

According to a report by the GSM Association, governments in emerging markets are overtaxing wireless services. The study claims high tax rates are preventing potential subscribers from adopting mobile devices. In 16 of the 50 markets studied, 20 percent of the wireless service cost came from taxes. The average subscriber in those markets pays an estimated $40 annually in wireless service taxes.

The UN's Millennium Goals include equipping 50 percent of the world's population with modern communication by 2015. However, the study estimates 75 to 80 percent of the world's population is already in an area with wireless services, while only 25 percent of people in these areas use them. The study also suggests the high taxes are leading to a more profitable black market. In 2004 an estimated 39 percent of all handsets sold in the countries studied were sold through the black market, an estimated revenue loss of $2.9 billion.

For more on the effect of high taxes on emerging wireless markets:
- check out this piece from eWEEK

PLUS: Motorola wins contract to make 6 million cheap phones for emerging markets. Article

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