LTA puts end to controversial ‘three days free calls’ promotions, paper says

3 Sep 2019

The Liberian Observer reports that the government of Liberia, acting through industry regulator the Liberia Telecommunications Authority (LTA), has outlawed the controversial USD1 for three days’ worth of unlimited calls promotions by mobile network operators (MNOs) Lonestar Cell-MTN and Orange Liberia, that have been used by Liberian subscribers for the past five years. The so-called ‘three days free calls’ promos (and other anti-competitive promotions) are believed to have cost the mobile sector gross revenues of more than USD58 million between 2015 and 2018, according to the LTA’s findings. Both MNOs have been listed by the Liberia Revenue Authority as being among the largest taxpayers in the country, but tax takes have fallen in a period in which mobile revenues have fallen from a high of USD150 million in 2015, down to USD92 million in 2018.

‘As one of the largest contributors to national income … depressed telecoms prices result in lower tax and revenue to finance public welfare and development programs and have an overall negative impact on the country,’ a statement from the watchdog read. The LTA’s announcement comes after it imposed a new price floor (Order 0016-02-25-19) effective from 15 April 2019, and an intervention to stop ‘predatory pricing wars’ between the two MNOs which have ‘stifled sector growth and plummeted revenue significantly over the last few years’. The new order comes despite a legal challenge from Orange Liberia, which was defeated in the courts. Going forward, the cellcos are reportedly ready to cooperate with the new regime when a new regulatory fee (5%) and price floors on mobile voice (on-net), and mobile data services are introduced on 1 September 2019. Voice packages will now have a minimum floor price of USD0.0156 on each call provided in packages to customers by their MNO. Data packages will now have a minimum floor price of USD0.0218 per MB of data provided to customers by their MNO. Further, by 15 October 2019 there is expected to be a surcharge of USD0.008 on all on-net voice calls, as well as USD0.0065 per MB of data.

The LTA’s ruling is hoped to end a price war between Liberia’s mobile operators that dates back to 2012 when some cellcos introduced unending price promotions that forced all competitors to retaliate in kind. As a result, call prices plummeted from ‘14 cents per minute in 2014 to less than one cent per minute in 2017 and are still falling’, ostensibly forcing several smaller operators such as Novafone and Libercell out of the market and creating a duopoly.