Prices For Data And Voice Increase Due To Liberia Telecommunications Authority Order
In February, 2019 the Liberian Telecommunications Authority (LTA) issued LTA Order: 0016-02-25-19, which imposed surcharges of US$0.008 for each minute of on-net voice calls and US$0.00065 for each megabyte of data. Both Lonestar MTN and Orange Liberia Inc. challenged this LTA Order for many reasons, among which was that the surcharge was a tax and only the Legislature has the power to impose tax.
However, only Orange Liberia Inc. challenged the LTA Order in court by filing a Petition for Judicial Review with the Civil Law Court for the Sixth Judicial Circuit in April, 2019. The Civil Law Court issued a Prohibition or Injunction on the LTA Order and mandated that the LTA Order shall not take effect until the matter before it was finally determined. Incidentally, this Prohibition or Injunction is consistent with Section 81(3) of the 2007 Telecommunications Act.
It should be recalled that after a hearing at the Civil Law Court, that Court ruled that the LTA had the power and authority to issue the LTA Order. In response to this Ruling, Orange Liberia appealed to the Supreme Court. That appeal, according to legal experts, placed its own Prohibition or Injunction on the Civil Law Court’s Ruling pending a final determination by the Supreme Court. It is in early September that the Supreme Court affirmed the Civil Law Court’s Ruling by saying, among other things, that the surcharges imposed by the LTA Order are not a tax; they are instead “additional costs”; which the LTA, in keeping with its powers under the 2007 Telecommunications Act, has the authority to impose.
After the Supreme Court’s Ruling, Orange Liberia Inc. and Lonestar MTN separately sought meetings with the LTA to agree on the method of compliance with the LTA Order and the Supreme Court Ruling so as to avoid any disruption in telecommunication services. Instead of LTA agreeing to a meeting, the LTA first sent a bill of approximately US$16.4 million to Orange Liberia Inc. and a bill of approximately US$9 million Lonestar MTN for surcharges for the period, March 2020 through August 2020. Thereafter the LTA agreed to separately meet with the service providers.
Information gathered from the meetings held by the LTA with the service providers is that LTA insisted that the service providers should pay the invoices from their own resources before the LTA can discuss anything about how to implement the LTA Order in the future. The service providers contended that the surcharges were never intended to be paid from their own resources; the surcharges were intended to be “additional costs” to be added on their costs, paid by the users of telecommunications services, collected by the service providers and paid over to the LTA. The service providers also said that they never placed the “additional costs” on their services to their customers because of the Prohibition or Injunction, which operated as a matter of the 2007 Telecommunications Act as soon as the Petition for Judicial Review was filed in April, 2019. In response, the LTA threatened that if the service providers did not pay the invoices, they will receive additional bills each month as of September 2020 and if they still don’t pay, the LTA will suspend their licenses, take them to the Debt Court, and even report them to the Ministry of Justice to compel them to pay the invoices.
The service providers regarded the threat from the LTA as a breakdown in negotiations and therefore decided to immediately place the surcharges of US$0.008 for each minute of on-net voice calls and US$0.00065 for each megabyte of data effective October 5, 2020. This has been announced by both Orange Liberia Inc. and Lonestar MTN late last week; and this means that as of October 5, 2020 there will an increase in the prices for data and voice call.
Some legal experts are of the opinion that all that Orange Liberia Inc. and Lonestar MTN are doing is to prepare for the possibility that the LTA will take them to the court. These service providers want to show that they have in good faith tried to comply with the LTA Order and the Supreme Court’s mandate but that it is the LTA, which is misconstruing the Supreme Court’s mandate by demanding them to pay monies that they had not collected from their customers. Officials of both Orange Liberia Inc. and Lonestar MTN, who prefer to remain anonymous, say that were they compelled to pay the amounts of these invoices from their respective resources they will immediately go bankrupt. The service providers are hoping that the LTA will see reason to allow the surcharges (“additional costs”) to take effect as of October 5, 2020; which is what should be the case based on the 2007 Telecommunications Act and the Supreme Court’s Final Judgment; but it would appear that the LTA insists that the service providers must immediately pay the US$16.4 million and US$9 million or they will be shut down.
Will this matter return to the courts for proper interpretation of the law and enforcement of the mandate of the Supreme Court or is it possible for the parties to negotiate an amicable settlement? Only time will tell; but meanwhile, all users of telecommunications services must expect that the costs to them will be increased effective October 5, 2020 by US$0.008 for each minute of on-net voice call and US$0.00065 for each megabyte of data.