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Liberia: Senate Committee Opposes Additional Surcharges on Telecommunications

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FLORIDA – The Liberia Telecommunications Authority (LTA) is bent on pursuing GSM Companies to increase the cost of internet data with additional surcharge, but the Liberian Senate wouldn’t let it happen – at least not now – citing the hardship in the economy.

The Senate Post & Telecom Committee’s recommendation for a hold to be placed on the additional surcharge which is to be imposed by the LTA was based on a plea for their intervention by the CEO of Orange Liberia, Mr. Mamadou Coulibaly. According to Mr. Coulibaly, the surcharge would increase the already-increased GSM operators’ prices by two-folds.

The LTA in September succeeded in bringing an end of the long-running three-day unlimited calls for US$1 and very low prices for internet bundles. A new tariff of US$0.0156 per minute was introduced as the new floor price. This, in effect, limited voice calls from three days unlimited for US$1 to US$1 for 45 minutes on-net calls. Mobile internet data was adjusted from US$1 for 1 gigabyte to US$0.00218 per megabyte. Liberians, from all walks of life, criticized the adjustments, claiming that the government was being insensitive to their plights and the economic situation in the country.

However, as part of the new regulation which introduced the new tariffs, the LTA is to further impose additional charge of US$0.008 for each minute of voice call and US$0,0065 for each megabyte of data. These charges are expected to come into effect six months after the introduction of the new floor prices.

The LTA argues that the new floor prices would bring stability to the mobile telecommunications market and improve services provided by the operators.

“The Senate, as a matter of urgency, should engage the LTA not to impose the contemplated surcharge until the country’s economic conditions are favorable. Admittedly, these are difficult times in our country, and it behooves us, as representatives of the people, to do whatever we can to minimize their sufferings. The imposition of a surcharge on telecommunication products as contemplated by the LTA, in the words of the GSM Operators, will be harmful. This must not be allowed.”

Recommendation, Senate Committee on Post and Telecommunications

Mr. Ivan Brown, Chairman of the LTA told the Senate Committee when he appeared for public hearing in September that since the introduction of “three-day free call” by Cellcom (now Orange) in 2013, Orange and LoneStar’s revenue dropped by US$100 million. This, according to him, resulted to the decline in service as well as affected growth. The drop in revenue, accordingly affected expansion of GSM Companies and affected their ability to install new towers and operate existing ones efficiently. According to him, a segment of the population who needed the service were left out.

He further explained to the Committee that if the predatory pricing which was being “illegally” practiced by the two companies was not halted by the LTA, it would have led to the monopoly and prevented new companies from coming into Liberia.

“To sit and do nothing as a regulator would be a disservice to our people because between the GSM Operators, none would be willing to be the first discontinue the “three days unlimited calls” promotion for fear of losing customers and market shares to the other,” he is quoted as telling the Senate Committee.

He further stated that despite the new regulatory fee, Liberia as the cheapest telecommunication market or mobile phone calls and mobile data rate in West Africa.

Despite his argument, the Committee recognize the concern from the mobile operators that there is the need to increase 45 minutes per dollar on voice calls to at least 60 minutes per dollar. They also pleaded with the Senate to intervene in the additional surcharge on voice and data to be introduced by the LTA.

In response, the Committee recommended “The Senate, as a matter of urgency, should engage the LTA not to impose the contemplated surcharge until the country’s economic conditions are favorable. Admittedly, these are difficult times in our country, and it behooves us, as representatives of the people, to do whatever we can to minimize their sufferings. The imposition of a surcharge on telecommunication products as contemplated by the LTA, in the words of the GSM Operators, will be harmful. This must not be allowed.”

The Committee also said there is the need for the LTA to consider the additional 15 minutes being requested by the mobile operators to be added to the adjusted 45 minutes for US$1.

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