European Commission considers 14% tax on GPS phones

MOST READ
LATEST NEWS

Compare broadband and
mobile phone deals at Top10.com

EVENTS

4G World 2010 October 18 - 21, Chicago

4GWE Conference, Oct 4-6, Los Angeles

The Location Business Summit USA, 14-15 September, Crowne Plaza, San Jose

Advertize your telecoms job

JOBS

Mobile Industry & Technology Journalist - freelance

HOT TOPICS

European Commission considers 14% tax on GPS phones

By CAROLINE GABRIEL

Published: 15 December, 2008

READ MORE: Europe

The European Commission is having a busy month in the telecoms field, and its latest controversial idea is to slap a 14% import tax on handsets with integrated GPS or TV functions.

The suggested duty harks back to the old days of heavy European protection for its own wireless industry, and is understood to have been proposed by device makers in Germany and the Netherlands, which face rising competition from advanced products from Asia.

The European Union has already imposed a range of import taxes on devices with external TV tuners, but cellphones are currently duty-free. But an EC spokesperson said that units that incorporate multiple functions, such as GPS positioning and mobile television, are more than cellphones and should be defined as "apparatus with multiple functions, including mobile telephony" - which could enable them to be subjected to different tax laws to normal handsets.

However, non-EU vendors and consumer groups claim such a tax could increase the cost of handsets with both functions by as much as 25%, hitting uptake by users in a time of depressed spending, or forcing operators to subsidize advanced smartphones heavily. The

European Information and Communications Technology Association, which is backed by companies like Apple, Sony Ericsson, Motorola and LG, is leading the anti-tax lobbying.

Also on the mobile TV front, the EU seems to be weakening its support for DVB-H as a preferred common standard for the region. Last week's new statements on mobile TV centered on interoperability of multiple standards rather than mandating one technology. Mobile Europe points out that last week's EU statement said: "Aspects related to interoperability and roaming for mobile TV should be given due consideration in light of the wireless nature of the services", a contrast with comments by Commissioner Viviane Reding in March, that said: "For mobile TV to take off in Europe, there must first be certainty about the technology."