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CDC shooting itself in the leg? (Pt-1)

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It appears there is an ongoing silent battle within the ruling Coalition for Democratic Change or CDC government as it relates to the implementation of the Liberia’s Telecommunication Authority’s or LTA’s proposed price floor, which should have kicked off on April 15, this year.

LTA last year tabled a proposal which it says in general terms is aimed at intervening in the ongoing price war between the two GSM service providers here, improve services and rejuvenate reinvestment in the sector.

The new proposal which the Liberian telecommunication regularity body says was expected to take effect on April 15, 2019 discourages the current 3days free calls promotion and introduces a new price ceiling that would allow consumers to now pay USD0.0156 cents for calls or LRD 2.5 (two dollar five cent Liberian Dollar) per minute and 0.0218 cents for internet data which amounts to LRD 3.4 (three dollar four cent).

But CDC Chairman Mulbah Morlu, one of the vocal opposition to the proposed price floor has insisted that the new measure will only put money into the pockets of Mr. Benoni Urey, the leader of the opposition All Liberian Party or ALP and Chairman of the Lonestar MTN Board of Directors to unseat the Weah Government rather than boosting the economy.

However, authorities at the LTA have maintained that their new price floor is mainly centered on boosting the ailing Liberian economy.

As part of the new proposed price regime LTA said a 5% tax will be imposed on total sale of domestic telecommunications goods and services or GST as regulatory fee which is expected to up government revenue by USD2m per annual.

Documents available to this paper shows that both GSM companies-Lonestar Cell MTN and Orange agreed with the new price floor for on net voice calls, a data services and the 5% regulatory fee. But a bone of contention is the decision on regulatory surcharges.

Section 4.1 of the LTA’s Order: 0016-02-25-19, states: “One the six monthly anniversary of this Order, being October 15, 2019, there shall be automatically imposed a surcharge on-net voice call of US$0.008 for each minute call.”

4.2 States that: “On the six monthly anniversary of this order, being October 15, 2019, there shall be imposed a surcharge on mobile data in the amount of USD0.0065 for each megabyte of data.”

4.3 States that: “The surcharges subject to this subpart shall go into immediate effect on the specified date with no additional notice or Order required, subject to any determination arising from a review and analysis of market indicators that may be pursuant to Sections 5.1 and 5.2 in the sole discretion of the LTA.”

According to reports officials at the LTA have argued that the surcharges will increase government revenue by US20million annually. Bug the sad part is that this will witness a significant reduction or drop in traffic from low income customers. A source told this paper that Orange might likely see an 86% drop in customers of low income earning, while Lonestar MTN will record around a 42 percent drop in low income earning customers because of the data cost.

The regulatory surcharges would passed the burden of payment for the reduce charges to elite customers, while making it very difficult for customers listed in the lower brackets to pay for data as this may increase the cost of data by 10%.

Some officials in the CDC government are vehemently oppose to the surcharges because according to report it undermines the measures recently announced by the government to boost the rejuvenate the economy, but there are also reports that the LTA intends to fight this.-to be continued.

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