The Liberian Telecommunications Authority (LTA), new proposed price floor and surcharges will only enrich the opposition against the Coalition for Democratic Change or CDC, according to the ruling party’s Chairman Mulbah Morlu in a recent rant.
Mr. Morlu says the proposed 5% regulatory fee, and the 15% tax in surcharges are enough to fund the opposition in an attempt to unseat the CDC in the 2023 Presidential and Parliamentary elections.
The surcharges which are expected to take automatic effect on October 15, this year, will increase government revenue from USD2 million to USD20 million per annual, while increasing the amount mobile users pay for data.
This proposal appears to undermine the government’s own austerity measures that aim to lower the high economy burden being experience by the ordinary citizens.
Aside the politicization of the LTA’s new proposed price floor, the surcharges would affect both GSM service providers here as many of their customers would drift off.
For example, a surcharge of 0.008 would lead to a 42% drop in Lonestar cell MTN’s revenue and that would also affect low value customers within the US$1.00 bundle, while Orange which would see a 10% increase with the imposition of the new price floor will record an estimated 86% drop in traffic from low income consumers.
However, according to the LTA’s February 20, 2019 report on the public consultation on establishing the price floor for on-net voice and data services and regulatory fee on Telecommunication goods and services, the new measures are aim at rebalancing the price and market stabilization.
The LTA said in its report that “price floors are a win win situation for all sides” it means increase revenue for the mobile companies and revenue for the government and increase access and quality service for subscribers.
In its proposed package, 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.
The two 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.” To be continued.