Digicel and LIME’s move to ban VOIP apps bad for innovation in Jamaica
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The move by Jamaica’s two telecoms to ban voice over internet protocol (VOIP) applications on their networks sets a dangerous precedent and will inevitably stifle innovation in Jamaica.  Skype, one of the applications banned by both networks was founded 10 years ago by non-Americans and was in 2011, sold to Microsoft for 8.5 billion US dollars.

Their decision to ban VOIP almost guarantees that no innovation from that space will come from Jamaica, sets us at a disadvantage and makes our country more uncompetitive.

In a June 29, 2014 Gleaner article, Digicel’s Antonia Graham, head of communications at Digicel is quoted as saying  “Unlicensed VoIP operators like Viber and Nimbuzz use telecoms networks to deliver their services, but they do not pay any money for the privilege,” she goes on to say “the unauthorised activity puts enormous pressures on bandwidth – which means customers’ data usage experience is negatively impacted as a result”. As an Internet Entrepreneur, how am I supposed to take that message?

My startup, http://www.EduFocal.com is an online social learning service for GSAT and CSEC students in Jamaica; we offer test prep questions and answers in a fun, unconventional way. We do, however, plan to expand to video content in the near future and offer our service to hundreds of schools across Jamaica and the Caribbean. Thousands of students will be consuming our content on their cell phones, tablets and desktop computers and this will no doubt “put enormous pressures on bandwidth” for Digicel. As a small startup, will I at some point be required hire lawyers to negotiate with Digicel for this “privilege” instead of focusing on innovating?  Are other small Jamaican entrepreneurs who are creating opportunities for others be required to do the same at some point?

Many Jamaican entrepreneurs have used and continue to use the internet to create opportunities for themselves and others. Marc Gayle, Co-Founder of http://www.10poundpledge.com/  and a friend of mine allows users to pay ( via the internet) for an exercise program that can be streamed or downloaded for use in the home is an example of a service that has the potential to utilise above average bandwidth for his product. Marc and I are two examples, but there are many other entrepreneurs who could potentially be affected by this move by Digicel and LIME in the future.

For us to achieve Vision 2030, Jamaican internet entrepreneurs need an open internet where innovation is allowed and encouraged and freedom reigns. A regulated Internet is a comforting thought to internet service providers (ISPs), but a scary thought to entrepreneurs and the ecosystem around them. I hope Digicel and LIME reconsider this decision and explore equitable ways of maintaining and growing their revenue and staying competitive in this ever changing world.

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The Narcissistic Entrepreneur
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I came across the below post on Facebook and it truly made me think about who I am and how I view others.  It was written by my friend Niel Harper. Shared with his permission. Enjoy!

It’s been quite a while since I have posted anything even marginally controversial on Facebook. But there is a trend I have been witnessing that has necessitated a brief sojourn out from my agitation embargo. I am going to refer to the aforementioned trend as “narcissistic entrepreneurship”, and it is characterized by inflated egos, superiority complexes, and a certain intolerance / indignation for anyone who is not “working for himself or herself”.

First of all, let me state that none of us ever truly work for ourselves. We work for our employers, customers, shareholders, investors, employees, families and most of all for the state (have to pay those taxes folks!!!). Trade and commerce are symbiotic in nature, and the complex interweaving of dependencies is often forgotten (or ignored) by most.

Secondly, entrepreneurship is a compendium. There are several types of entrepreneurs; all of which must be understood and appreciated for what they are worth. Now let’s take a look at some of the different types:

1. The Octo-Boss
These are the brave and adventurous souls (or so they think of themselves) who have started a small enterprise and take on numerous roles — strategic, tactical and operations — to keep the business afloat. They market the business, manage the books, answer the phones, meet with potential investors, serve the customers, and anything else that is required to be successful. Work-life balance maybe an issue, but who cares. They are their own boss. Right?

2. The Obstinate Artist
These individuals are generally ‘anti-system’ and committed to freely living their passions. Albeit, many of them are starving or not making enough profit to live a comfortable existence. Still, they are the ‘free spirits’ among us — the painters, musicians, budding fashion designers, etc. — who enjoy being untethered and have made a statement by rebelling against the man and his wage labor oppression. Fight the power!

3. The Freelancer
This person currently runs their life as if they are actually working for a company. They are so highly skilled and effective that they only work on a contractual or project basis, They maintain flexible working hours or work remotely, negotiate excellent remuneration and a litany of perks, and pretty much still enjoy all the benefits of being an employee (without actually being one). Some of them even secure such large contracts that they can outsource the work to others. All power to them.

4. The Simplistic Frugal
He/she has a simple business model. They have found one thing that they’re very good at and committed to (e.g. Selling coconuts, snow cones, fruits, nuts, grilled fish, etc.). They generally have mastered their supply chain, or have very little overheads, and profit margins are substantial. They are not extravagant by any means, save most of their money, and have made some very shrewd investments. Over an extended period, they have build significant wealth, but one would not know from seeing them. Be careful who you judge.

Some of you maybe wondering what is the point I am trying to make. It is simple. There are many entrepreneurs who think their path is so much more righteous than the road travelled by those in the money-for-labor system. But every entrepreneur is not a success, and every success is not an entrepreneur. For those beating themselves up because they haven’t started their own company, think about where you fit on the compendium. Landing on the cover of Entrepreneur or Fortune is not the only route. Every single one of us has the ability to create something. And we all can succeed if we find our niche and perfect our craft. One love and best of success!

About the Author

Niel Harper is a subject matter expert in ICTs for development, cybersecurity, technology governance, and online learning. He is engaged with a number of organizations in the Internet ecosystem, and is passionate about educating and empowering individuals to use technology to improve their lives and their communities.

You can find his blog here

 

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Response to Damion Crawford re: Critique of my post on Government Withdrawal tax.
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I appreciate that Junior Minister, Damion Crawford took the time to craft a response to my blog post titled “ The Jamaican Government’s Withdrawal Tax is anti-business, does not protect the poor and weakens the middle class” You can find his response to me here. 

It’s important that we distinguish between revenue/income, profit and day to day working capital needed to run a business.  The $6,000,000 mentioned is not profit or income, it’s day to day working capital, i.e money that you use to make money; the government is essentially taxing the money that businesses will use to make money and if they’ve made any money then the government taxes the business again. Day to day capital is crucial in the running of any business and I think that your math calculations oversimplifies how much of an impact the withdrawal tax will have on businesses and individuals.

I am not opposed to taxes and I don’t think any well thinking Jamaican is opposed to it either, but I strongly believe that it can and must be equitable to the majority.

A relevant and poignant example:

John Brown is in construction and he is the owner and operator of a company called Brown’s Construction Limited. Mr. Brown recently took on a house building project for his client, Miss Sandra Miller (She took a loan). To get the ball rolling, Miss Miller sends $1,200,000 (She wires the money to him as it’s illegal to have more than a million or equivalent on your person) to Mr. Brown solely to buy construction material for her house (e.g blocks, steel etc), in this particular scenario a withdrawal tax of 0.09% would be applicable to Miss Brown. She would then pay $1,080 ( of course the bank’s charge has not been factored in).

Needing to purchase the material, Mr. Brown would then need to pay the hardware store or his supplier the $1,200,000. This is considered a withdrawal so the 0.09% tax would again be charged. Bringing the total tax for more or less one transaction to $2,160 JM + Bank charges.

This is another potential scenario and I’m afraid that raising the income tax threshold will not offset the other additional expenses that Miss Miller and others will inevitably have to deal with.

You mentioned in your post that it “protects the most vulnerable”, I disagree.  Everybody is affected, some much more than others. Government policies – particularly taxes – have knock on effects that ripple through the economy. It can show up in many different ways, sometimes in inflation (in this case price increases right across the board) – which hits everybody – or sometimes not as prevalent as economy wide inflation but just price rises on many goods and services.
There is a reason why it is the largest revenue measure for FY 2014/2015.

If after understanding what I’ve said above and still holding the view that it is fair for the majority then there’s not much else I can say.

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The Jamaican Government’s Withdrawal Tax is anti-business, does not protect the poor and weakens the middle class
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I commend Peter Phillips on the work that he has done in the Finance Ministry thus far. Our debt to GDP ratio is down, interest rates are not as high as they used to be and inflation is down, but the recent move by the Jamaican government to implement a levy on bank withdrawals is a bad move. It is an anti-business and retrograde move.

Let me explain.

A little bit over a year ago I published on this blog a debit card charge comparison chart for Jamaican banks. You can find that blog post here.  The chart has not been updated , but I am certain that bank charges have been adjusted (upwards) since.

To summarise the chart, two of our largest banks, National Commercial Bank ( NCB) and Scotiabank had some of the highest charges, Scotiabank charging $66 JM for each multilink withdrawal while NCB charged $60.34 per withdrawal from a multilink ATM.

In January 2014, the Jamaican government launched an investigation into the fees that commercial banks and credit unions charged, I believe that consensus was that bank fees were too high. See a news release on the issue here .

You can find the ministry paper for the withdrawal levy here.

Side note: Why are we getting scanned copies of ministry papers in 2014? Why can’t we get the original document in PDF format?

Information on the Levy is #3 in the paper. For convenience, see it below:

a) As part of Revenue Measures FY 2014/2015, the House is being asked to approve the introduction  of a levy on withdrawals from deposit-taking institutions  and encashments from securities dealers.

b)  This levy will be chargeable  on all withdrawals from deposit taking institutions by means of: -

i. Electronic banking (e-banking)
ii. Point of Sales (POS)
iii. Cheques
iv) Withdrawals – ABM/ATM/ETM or over the counter and;
v  Internet transfers (with the exception of transfers between accounts of the same person in the same financial institution)

If you’re withdrawing less than a million JMD from the bank the government will take 0.1% of it.
Between a million and 5 million the government will take 0.09% of it.
Greater than 5 million, but less than 20 million and the government will take 0.075%
Greater than 20 million dollars and the government will take 0.05%

So, if you go to the ATM and you withdraw $1,000 or you pay it at your favorite restaurant  the government will take $1.
If you buy $5,000 worth of gas for your motor vehicle and you use your card the government will take $5. Not a big deal, in fact, it’s negligible. Surely you can give your government $1 on every 1,000 up to $999,999.

With close to 1 million Jamaicans unbanked this move  still (supposedly) protects the most poor and vulnerable.  Great, but not exactly.

The government, understanding how tough things are for their people even moved the personal income tax threshold from $507, 312.00 to $557, 232.00 causing  a whopping 12, 823 persons to fall outside the tax base.

On an individual level the levy is in fact negligible, but that that’s not where the real issue is. Inevitably the banks will pass this charge on to their customers via an increase in bank charges, this is fair, but bear in mind, the consensus was that bank fees were already high. Not only will the bank charge you for the actual tax, they’ll charge the customer for the administration involved in paying the government the tax monthly, implementation of the levy etc, so expect increased fees from the banks soon if the levy is not revised or removed.

The second and larger issue. Many llegitimate medium sized and large businesses pass millions of dollars through their respective banks daily, i.e millions of dollars worth of deposits AND withdrawals. Legit businesses that both the poor and middle class utilise. e.g restaurants, gas stations, supermarkets etc.

Here’s a scenario:

John Brown owns a business that deals with a lot of cash (e.g money gram locations, bakeries, supermarkets etc). On a daily basis John deposits 6 million dollars into the bank. John needs 5 million $ to cover his bills daily.  So, John would need to withdraw that 5 mil. John (or that transaction) would therefore fall in the 0.09% bracket.

$5,000,000 * 0.09/100 = $4,500. John is paying $4,500 in taxes DAILY. Not a big deal, right? But wait, John operates 300 days out of the year. So, 300 * $4,500 = $1,350,000 in taxes.

John loves his country, but he’s also operating a business and will have no choice but to pass on these charges to his customers, of course prior to this John was struggling with the already high bank charges. This is just one example, but there are many others.  There are other consequences, but I think these are the ones that will affect us the most in the short and medium term. The poor and middle class will suffer.

Of all the revenue measures, the government will make the most from the Withdrawal tax ($2.250 billion), but I would encourage them to reconsider and explore more equitable and sensible alternatives.

Feedback is of course always welcome.

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Why LinkedIn is important for Jamaicans
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A couple of days ago I saw a conversation on twitter questioning the usefulness of LinkedIn for Jamaicans. While not as useful to Jamaicans as it is for Americans, I still think a lot of value can be extracted from the service.

1. LinkedIn is google friendly: Whether you like it or not, people will google your name. This could be the difference between you landing that dream job, getting that business deal or whatever else. You can’t control what is indexed when your name is googled by others, but you can influence it.  Nobody wants to a be a virtual unknown on Google.  My linkedIn page is the 6th result when my name is googled. My Wikipedia page is first, my personal blog second, my twitter page 3rd and 2 gleaner articles in 4th and 5th place.

A linkedIn page is an opportunity to showcase the best of you. You don’t get that opportunity when an external party writes a blog post about you, newspaper article etc

 

2. A great way to connect with professionals you’ve met: You go to a business meeting or networking event, you meet a few people and you’re interested in keeping that connection. They’re not on twitter or Facebook, but if they are you’re not comfortable following them there or they’re not comfortable being followed. LinkedIn is that professional network between Twitter and Facebook.

 

3. An easy way to keep your CV updated: Keeping your CV updated isn’t something that only job seekers do.  Prior to LinkedIn I kept my CV updated via a Microsoft word document. It wasn’t a frictionless process so I didn’t make it a habit to keep it current. LinkedIn on the other hand makes it very easy to do. Whether you’re looking for a job or not, it’s important that you keep your CV updated as it may requested at some point for whatever reason. Whether it’s because you’re getting an award, speaking at an event or some other reason.

 

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Travel Utilities
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I spent a couple days in Geneva, Switzerland and planning the trip wasn’t a huge hassle because of technology. If you know me, you know I’m not big on traveling, but these utilities really helped me to make it as pleasant as possible.

Evernote

I’m a HUGE Evernote fan and I’ve been using it for a few years. I’ve never had the opportunity to use it for travel until now and it really shined. It was particularly helpful with my pre-planning and just helping me  to deal with airport hustle and bustle. I’ve written about Evernote before ( years ago), but I still can’t really pin down a great explanation for it. Put it this way, Evernote is great at storing stuff, that “stuff” could be videos, audio, PDFs, emails etc; anything and everything. Not only is Evernote great for storage, but it’s also really good at helping you to find the things you’ve stored in it. Evernote’s search feature is really powerful and can find a word, phrase, sentence or whatever within PDF files, word documents or on an actual image.
Evernote’s web clipper extension really helped me to save information I came across while researching Geneva. I created a notebook (think: folders) called “Geneva” and just threw all my trip related information in there. When I got emails that were related to my trip in my email for example I would use the web clipper feature and it would automatically format the email and save it in my “Geneva” notebook. I also saved my flight itinerary in it. When I was ready to travel I made the notebook available offline and hit the road. Evernote’s “offline” feature for notebooks allows you to access all your files whether or not you have internet access. This makes it easy for me to access the files from my iPad, iPhone etc.

Word Lens (iPhone version)

I knew about this app for a couple years, but never had a reason to use it. It’s amazing. I can point my iPhone’s camera at any french sign and it instantly translates what I’m seeing through my iPhone’s camera to English (no internet connection required). They have different language packs that you can purchase, I purchased the French to English language package as many signs in Geneva are in French.

Kayak

My friend Jamie introduced me to Kayak; It’s really good. Once you get your itinerary, forward it to your personalized kayak address and that’s when the magic happens. Kayak will email you when it’s time to check-in, if your fight is delayed it will email you, it will let you know what your gate number is and many other features. Check it out at kayak.com

iPhone Clock

From Kingston to Miami, from Miami to London and from London to Geneva. All with their different timezones. It’s easy to get thrown off by this. Before I left I added the clocks for each respective location to the iPhone’s world clock (I’m sure you can also do this on any other smartphone) . Problem solved.

Hopefully you find these useful the next time you’re traveling. Leave your tips in the comment if you have any. I would love to hear how other people are utilizing technology to make traveling easier and more pleasant.

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