The main objective of this article is to explore and
describe the impact of the Value-added tax (VAT) increase on Mobile Telephone
Networks (MTN) performance by exploring the end-to-end telecommunication
(telco) business process. For the nature of this research, there is limited
research in both South African and international scholarship that seeks to
explore an understanding of the full end-to-end telco industry where study
would look at the complexity of telco strategies right from the product
catalogue down to rate cards, price configuration, system capacity, network
depletion rules, billing engines, and customer invoices. Failure to apply the
correct VAT change to any of these elements will result in either over- or
underbilling of customers. This is a serious problem because an undercharge influences
the operator’s revenue, causing a loss, not just because of the 1% VAT
increase. Damages can reach far beyond this: an overcharge may increase
customer complaints and result in reputational risk that is not limited to
customer churn. This article provides insight into how fiscal policy affects
industries. The insights and practical experience gathered in the research
field can be used for operational improvement, training, risk identification
and control development in the telco industry. A mixed-method design was used
with a case study approach. This article reports on the qualitative findings.
Five main themes were identified after analysing the qualitative data, namely:
the effect of the VAT increase on MTN’s performance, change management, change
in business processes, the impact of an incorrect VAT rate on MTN’s system, and
system or process configuration. The case studied and the primary data analysed
to explore the impact of a VAT increase aftermath are limited to the South
African telco industry. The change management risk exposure detected, root
cause analysis and insights of this article highlight the pitfalls that the
project managers, change management professionals, marketing, information
system and technology teams need to avoid when performing network
configurations and system updates in the telco industry. Over a decade there
has not been any new VAT content in South Africa since in September 1991, the
original general sales tax (GST) rate of 10% was replaced by the consumption
form of VAT subsequently, was adjusted to 14% in 1993. This article provides
new content with a close look at the telco industry to contribute and expand
the existing literature since VAT and GST are
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