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South Africa to Remove Luxury Duty on Smartphones Under 2,500 Rand

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South Africa’s government has proposed removing the luxury excise duty on smartphones priced below 2,500 rand (approximately $136.37) starting from April 1, 2025. The move, announced in the National Treasury’s budget statement, aims to increase smartphone affordability for low-income households and promote digital inclusion across the country.

Currently, a 9% ad valorem excise duty is applied to smartphones, but this will only affect higher-priced devices once the proposal is implemented. This change is expected to significantly reduce the cost of entry-level smartphones, making them more accessible to a broader segment of the population.

Key Factors Behind the Proposal:

  • The proposal is part of South Africa’s efforts to encourage digital adoption, particularly among low-income groups.
  • By eliminating the duty for smartphones under 2,500 rand, the government aims to bridge the digital divide and enhance access to technology for underserved populations.
  • This initiative coincides with South Africa’s plan to phase out 2G and 3G networks by December 31, 2027, to make room for 4G LTE and 5G networks.

Concerns and Criticism:

Some critics expressed concerns that phasing out 2G and 3G networks might worsen the digital gap for low-income users, particularly those in rural areas who cannot afford the latest devices designed for faster networks. Communications Minister Solly Malatsi noted that the high cost of smartphones, partly due to the excise duties, has been a barrier to accessibility and that discussions with the Treasury were already underway to address this issue.

The move is expected to positively impact the country’s push for greater digital inclusion and accessibility in the coming years.

Starlink Seeks More Spectrum Access in Italy Amid EU Coordination Delay

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Starlink, Elon Musk’s space-based internet service, is pushing for access to additional spectrum in Italy to expand its satellite broadband capabilities. The company, which has been operating in Italy since 2021, submitted an application two years ago for access to the E-band spectrum, which would improve communications between its three Italian ground stations and its satellite network. This request has not been previously disclosed.

The E-band frequencies Starlink is targeting—71.0-76.0 GHz and 81.0-86.0 GHz—are already available to the company in the United States. If granted in Italy, this additional access would significantly boost Starlink’s ability to serve more customers, especially as the company seeks to strengthen its first-mover advantage in the low-orbit satellite broadband sector.

Italy’s Industry Junior Minister, Massimo Bitonci, stated that the country is adopting a cautious approach, waiting for the European Union to coordinate a unified stance on E-band spectrum usage. The E-band is jointly managed by Italy’s Ministry of Industry and the Ministry of Defense, with some frequencies requiring defense approval. However, no decision has been made yet regarding Starlink’s request.

In addition to spectrum concerns, Starlink is contemplating expanding its network by adding a new ground station in northern Italy, where demand has exceeded expectations. Conversely, it may reduce its presence in southern Italy, where demand has been lower than anticipated.

Starlink has approximately 55,000 customers in Italy, a figure that highlights the growing demand for its service in the country, where internet access in remote regions remains a challenge.