Liberia’s lower house votes through telecoms law amendment allowing LIBTELCO to offer GSM services

12 Aug 2020

Liberia’s Daily Observer newspaper reports that the House of Representatives voted Tuesday (11 August) to amend the Telecommunications Act of 2007, Part IV Section 12 (2)(3)(4) and Section 13 (1) (2), to expand the functions of state-owned PTO Liberia Telecommunications Corporation (LIBTELCO) to become a GSM operator. The report notes that the amendment effectively expands LIBTELCO’s functions and role as a ‘revenue operator, to contribute towards the national budget’.

Members of the House of Representatives, acting on the recommendations of the Joint Committee on Post & Telecommunications; Ways, Means and Finance and Judiciary, approved the changes to the act which has now been forwarded to the Senate for approval. The committee had concluded: ‘The amendment of those provisions of the Telecommunications Act of 2007 as cited herein will enable the Government-owned Corporation ‘LIBTELCO’ to provide world-class telecommunications products and services at cheaper, affordable prices for all Liberians that will enable growth of various sectors, such as education, healthcare, banking, energy and serving the masses, at large, for a sustainable economic growth of our society.’

However, despite some heralding a ‘new dawn of the telecommunications sector’, industry watchers note that LIBTELCO’s prospects of making inroads in the domestic mobile market are slim at best. The sector is home to just two players Lonestar Cell-MTN and Orange Liberia, and has seen other companies taken over, or fail. For example, in the third quarter of 2013 Libercell was dissolved after it ran into financial difficulties, while Comium Liberia (renamed Novafone in September 2013), was later acquired by and merged into Lonestar Cell-MTN in 2016 after it too fell into financial difficulty.

According to the Liberia Telecoms, Mobile and Broadband Statistics and Analyses (2019) report: ‘Competition between the two key mobile operators, Lonestar Cell-MTN and Orange Liberia, has led to a reduction in pricing for voice and data services, and this prompted the regulator in late 2018 to suggest a tariff floor’. Further, the report notes that ‘the harmonisation of a disorderly mobile licensing and spectrum allocation regime has caused some difficulties, and market penetration remains low compared to other countries in the region. Penetration has also been affected by SIM card registration requirements imposed in recent years’. TeleGeography’s GlobalComms Database confirms that Liberia was home to around 2.98 million mobile users at end-June 2020, a cellular penetration of 64%, compared to the regional average of 85%.

Whilst it is clear the government is making efforts to resuscitate LIBTELCO – largely neglected since its failed privatisation bid back in 2005 – stepping into the mobile market as a direct competitor to Lonestar Cell-MTN and Orange Liberia could be ill-judged. The Daily Observer cites a former executive at the state-owned telco, who asked to remain anonymous, as saying that if it proceeds on this track ‘it would be prudent … to carve out a highly strategic and high-demand niche, where it can cultivate growth and not get slaughtered’.