The Liberia Telecommunications Authority (LTA) says its latest move to regulate the GSM companies operating in Liberia by introducing a new tariff regime is to enable operators have the capacity to reinvest in the local telecom sector.
The clarification, made by LTA commissioner Israel Akinsanya, comes in the wake of concerns in some quarters of the Liberian society that the government was ‘pressuring’ the companies about their respective “three-day unlimited call” packages which the fierce competitive service providers, Orange (then Cellcom GSM) and Lone Star-MTN, started in 2012.
Akinsanya told a Ministry of Information press briefing Thursday that in accordance with the Telecommunication Law of 2012, the LTA does not intend to put an end to the “three-day unlimited call” packages as speculated; but wants to ensure that the telecom companies do not sell telephone calls and internet data below the cost price “which they are doing now by offering unlimited calls.”
Consequently, the LTA, working with both Orange and MTN, has calculated that the cost for one minute of telephone call be 0.0156 cents, and cost for one megabyte of internet data, 0.218 cents, adding that this regulatory framework will stabilize the market by next year.
The regulator says this “minimum” price will still allow for both GSM companies to offer three-day promotional packages, and that consumers will [not] experience any big change.
On-net call (an internal call cost levied by either GSM company) which was charged 14 US cents in 2014, is now below one cent, he said.
The situation is said to be a blow to the companies to the extent that they have shut down about 200 transmission sites (towers) in rural areas at the detriment of locals, many of whom spend more money on transportation in their bid to get to nearby network coverage areas to make phone calls.
Commissioner Akinsanya said that the LTA, in the beginning of the cheap calls and data promotion, in 2012, was happy for consumers, but the ‘war’ (heated competition) between Orange and MTN has become so destructive trade-wise, with each company trying to drive the other out of the market.
“Both companies are selling calls and data below their cost price and are losing money but neither Orange nor MTN wants to surrender,” said Akinsanya.
He noted that the telecom sector was one of the largest areas of revenue generation for the country, so when it loses money, GSM companies pay less taxes to government for schools, hospitals, roads, and other development programs, something which could hurt the population more than a call and data spree.
The LTA has warned that if the price war continues, either of the two GSM firms will be forced off the market and Liberia will return to the era of monopoly when SIM cards were sold at US$65 and one company could charge any price at will.
Among several other ‘negative’ economic effects cited by the LTA official, the scramble over market between the two companies between 2014 and 2017, led to Liberia losing US$49 million, lamenting that this money could have opened farm-to-market roads, put medicine in the clinics and bring books to the schools.