3-Days Free call Threatened
Gov’t, Mobile Phone Companies Record Loses
A Commissioner of the Liberia Telecommunications Authority (LTA), Hon. Israel Akinsanya, has warned of possible tough times ahead in service delivery, especially to rural dwellers due to profit declines caused by a price-war between the Orange and MTN-Lone-star GSM mobile phone companies.
Disclosing this at the Ministry of Information, Culture and Tourism (MICAT) regular Thursday press briefing yesterday, commissioner Akinsanya stated that as a regulatory body in the country, the LTA wants to end the price-war between Orange and the MTN, as it is destroying the telecommunications industry in Liberia.He recounted that in 2012 some telecommunications providers began a price promotions that pushed all the telephone companies into a price-war, as while one company reduces its price, the others undercut their price in various cycles eventually bringing the price for calls and internet data to a level far below cost.
According to commissioner Akinsanya prices are so low that services are almost free with people in the Monrovia area enjoying cheap calls while people in the rest of the country cannot make calls or go online at any price, adding that the price for calls dropped from 14 cents per minute in 2014 to less than 1 cent per minute in 2017 and still falling.
“The prices drove smaller companies including Novaphone, West Africa Telecom and Libercell out of the market leaving only the MTN and Orange previously cellcom,” he said.
In his analysis, commissioner Akinsanya said both companies have over the years become destructive in selling calls and data far below cost to attract more customers at the expense of the other and improving services in the rural areas, with neither hoping to give up.
He said one trickle-down effect, is that telecommunications is one of the largest contributors to government revenue through the payment of taxes, but when the companies are losing money they are less likely to pay taxes to government to fund development projects such as the construction of schools, roads and hospitals.
Commissioner Akinsanya also feared that as the trade war between the two giants continue, one negative impact is that either the MTN or Orange will be forced out of the market and the country will go back to the monopoly days when SIM cards were sold at LD$85 and one company could charge any price it wanted.
Commenting on measures to stop the war, he said as a referee the LTA is highly interested in ending the war and bringing stability to the market, adding that to end the war, the LTA wants to enforce the telecommunications Law of 2012 which forbids telecoms companies from selling below their operational cost, which they are doing now by offering free calls.
He said in addition they are also holding consultations with various stakeholders to know their views and the way forward on the issue, adding that other countries such as Sierra Leone and Nigeria have used the price stabilization mechanisms to improve the quality of services for consumers..
“Consultations are on-going on how to stabilize the market using minimum price for calls and internet data with a view to improve on services nationwide. The minimum price of 0.015 cents for calls and 0.0218 cents for internet data will still allow Orange and MTN to offer 3 days free calls promotional packages. Consumers will not feel any big change when the prize stabilization begins next year,” he said.
He observed that Liberia has the lowest prices for telephone and internet services in West Africa, adding that promotional packages now offered can no longer go free, as the country has enjoyed free calls for years while the trade in-fighting have been going on.
“But now we see that anything free is expensive in the long run so the LTA is anticipating to introduce price stabilization in cooperation with the MTN and Orange,” he concluded.