Mobile telecommunications subscribers in Liberia are watching with great interest and anticipation as the rivalry between Cellcom Telecommunications and Lonestar Cell MTN escalates. The rivalry has raged on for several years now, mainly as a war of wit, with both companies using highly creative, yet provocative marketing messages attempting to woo customers to either side. But this war of wit has escalated to a vicious war of words – blunt, scathing, shaming public remarks that might soon require the intervention of an umpire.
Telco Sector ‘Politicized’
In a sharp reaction to a press statement released earlier this week by Cellcom, Lonestar warned her rival not to politicize the telecommunications sector.
Cellcom had reacted to a Mach 14, 2016 letter by Benoni Urey, Chairman of Lonestar Cell MTN, which called the attention of the President of Liberia to apparent damaging effects of certain promotions (he called them ‘freebies’) offered by telecommunications service providers to the Liberian economy. Urey, in his March 14, 2016 letter, explained how the government of Liberia was losing tens of millions of United States dollars in potential tax revenue as a result of the promotions. He also linked the loss of potential tax revenue to loss of industry revenue and subsequent loss of industry jobs.
Cellcom, however, dismissed Urey’s claims as “carefully calculated attempts to prolong Lonestar/MTN’s goal of restricting competition and thereby continuing to exploit the Liberian people.” Cellcom also described its own promotions as “a way of giving back to the people of Liberia and ensuring that Liberians have a little extra money in their pockets.”
“Cellcom’s claim that its promotion is meant to help the less fortunate Liberians is totally ridiculous,” said Zenu Miller, Lonestar’s communications director, adding that, “the truth of the matter is that Cellcom only introduced the US$1 for three days to gain market share at the expense of Lonestar and positioned itself to sell to Orange of La Cote D’Ivoire in the midst of trumped up numbers.
“If Cellcom insists on playing politics in the telecommunications communications industry, it must be prepared to answer questions on its shady relations with the Liberian Maritime Program and its owner Yoram Jay Coham of the Liberian International Ship and Corporate Registry (LISCR) to the Liberian People,” Miller said.
Lonestar Cell MTN was recognized by the government of Liberia several years in a row as the largest tax paying phone company. The company said while it has the ability to offer better promotions than Cellcom or any GSM company at any level, it chose not to do so at the detriment of the Liberian economy.
However Cellcom continues to recall Lonestar’s “exploitative” market entry at the beginning of the last decade, when the company charged US$65 for a SIM card.
Lonestar Cell MTN however warned Cellcom against politicizing the telecommunications sector and projecting itself as the only cellphone company that is in the interest of the Liberian people. The company noted, as a good corporate citizen it has the right to sound an alarm and inform the Liberian government against negative tax collection in the telecommunications industry.
“In our 15th year of operation, Lonestar Cell MTN is resourced to compete against any service provider on promotions or innovative services,” the company said.
Lonestar trying to help?
In May this year, the Legislature received a letter from President Ellen Johnson Sirleaf proposing, among other things, the imposition of excise of US$0.01 (one U.S. cent) per minute on all phone calls to support the 2016/2017 Fiscal Budget. The proposed excise, if approved by the Legislature, would take effect July 1, 2016, which is the beginning of the government’s fiscal year. As the national budget has not yet passed, it is not clear as to whether the charges would be retroactive to adhere to the July 1 date.
Urey’s letter was dated two months before the President’s letter to the Legislature, which suggests that she had given some serious consideration to the matter, but declined to address Urey’s concern about the ‘freebies’. Instead the President proposed a tax on all calls, across the board. What remains unclear, however, is whether the calls covered by the 3-day promotions would be taxed, since in fact they are registered as ‘free calls’.
In any case, the Plenary of the House of Representatives mandated its Committees on Ways, Means and Finance and Development Planning, and Judiciary to review the President’s proposal. The committees have not yet reported back to Plenary on the matter.
‘For good of the country’
Meanwhile, Lonestar Cell MTN says it has a binding duty to pay its rightful taxes; that every corporation that means well for the Country must join the bandwagon in paying its legitimate taxes due the government on the promotions.
Lonestar Cell MTN also clarified that its Board Chairman did not support the end of any promotion, but rather proffered the thought that GSM companies must pay taxes on free and below market calls to government.
“The concerns raised by Chairman Urey must not be used as a political tool, but an avenue for strengthening the economic gains of the country. If Cellcom and its CEO are boasting of a successful promotion, why was the Cellcom’s Chief Executive Officer (CEO) in Guinea expelled for the same promotion? The Guinean Government realized that the promotion was bad for its economy and the value of service,” the release noted.
Lonestar Cell MTN said it has shown the raw facts to the Liberian government and the negative impact on its revenue collections, coupled with the results of the market and value destructions of these promotions; in the absence of political innuendos.
“For those who have ears to listen, please listen, for we need to stop playing politics with tax payments for the good of this country and its people,” the release cautioned.