GSM Companies to Cough Up US$4M from Price Floor Gains

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The LTA mandate comes just a day after asking the GSM companies to restitute the money they earned from the implementation of the surcharges—a mandate which the companies have agreed to follow.

The Liberia Telecommunication Authority has hit Orange Liberia and Lonestar Cell MTN with more than US$4 million bill for gains made on the implementation of its price floor order. The US$4 million bill comes after a huge rigmarole over surcharges implemented by the mobile network operators, apparently as ordered by the LTA, as part of the aforementioned price floor regulation.

The surcharges, which was contained in Part IV of LTA ORDER: 0016-02-25-19, mandated the two GSM Companies to increase traffic on-net calls in the amount of $0.008 and $0.00065 on each MB of data.

According to LTA, their decision to charge the GSM Company such an amount is the result of their quest to promote and maintain a responsive and predictable regulatory environment that takes into consideration the needs of consumers, government and the operators.

“The Board of Commissioners of the LTA remains committed to promoting and maintaining a responsive and predictable regulatory environment that takes into consideration the needs of consumers, government and the operators. It is therefore reassuring the public that it shall continue to strike a balance among these various stakeholders in all of its regulatory undertakings. 

As a result of this latest development, the LTA said it is not only mandating Orange Liberia and Lonestar Cell MTN to restitute credits to affected consumers from October 8 – 14, 2020 during the implementation of the surcharges, but to also pay over US4 million dollar into government revenue as gains made.

The LTA mandate comes just a day after asking the GSM companies to restitute the money they earned from the implementation of the surcharges—a mandate which the companies have agreed to follow.

“Meanwhile, LTA has finalized the following for the public good: Mobile Network Operators to pay over US$4 million into government revenue as gains made on the implementation of the Floor Price. And that Mobile Network Operators reverting to the pre-surcharge tariff on voice and data services and restituting credits to affected consumers from October 8 – 14, 2020,” the LTA said in a press release.

It is yet to be seen whether the GSM companies will pay the US$4 million, especially when they have been told to restitute the credits to customers affected by the surcharge.

In a statement issued late Thursday night, Lonestar Cell MTN said it “remains committed to working with the LTA for the good of the public. Lonestar can also confirm that bundles have been reverted to pre-charge status. Customers affected by the surcharge will be reimbursed the difference.”

Surcharges background

The surcharge, which was contained in a regulation published by the LTA ON February 25, 2019, was implemented on October 8, 2020, after Orange Liberia lost a legal battle against the regulator at the Supreme Court.

In court, Orange Liberia argued that the implementation of the surcharges on mobile and data price was going to have a negative impact on its customers as well as its operations in Liberia.

But the Supreme Court disregarded the company’s argument and ruled that “that question arising from public policies on the imposition of price and their accompanying economic impacts are addressed to the judgment of the technical and political actors hence not cognizable for judicial determination unless there is a clear show of arbitrariness or that the administrative agency exceeded its jurisdiction touching on the imposition of price as required by law.”

However, during the period the surcharges were implemented, the regulator described the move by Orange and its competitor, Lonestar Cell MTN, to impose the surcharges (“additional costs”) on voice calls and mobile data, as “illegal and arbitrary “despite mandating them to do so as per Part IV of LTA ORDER: 0016-02-25-19.

In defense of its position, the LTA in a statement said it was taken aback by the “illegal and arbitrary increase in the costs of voice and data bundles by both Lonestar Cell MTN and Orange Liberia under the pretense of complying with the surcharge order. According to the LTA, under relevant provisions of its of 2007, no ‘Term Services” can be increased without their approval.

But Orange Liberia could not let the LTA’s accusation slide without firing back — accusing the regulator of lying when their action was in fact to impose surcharges or price on voice calls and mobile data came as a result of an order from the regulator after a court battle.

“It should be noted that it is Sections 4.1., 4.2, and 4.3 of the LTA ORDER, not the MNOs, which imposed the surcharges. These sections of the LTA ORDER specifically mandate MNO’s to impose surcharges on all on-net calls in the amount of $0.008 and to impose surcharges on each MB of data at a rate of $0.00065,” Orange Liberia said in a press release last week. “Instead of the LTA agreeing to meet on how to roll out this scheme of the LTA ORDER, the LTA sent Orange Liberia invoices in the amount of approximately US$16.5 million for the period, March 2020 through August 2020 to be paid by October 21, 2020, or Orange Liberia’s license be suspended and taken to court.”

The truce

After days of being at loggerheads and having felt the anger of consumers, the GSM companies and the LTA were able to amicably settle their differences regarding the effectiveness and implementation of Part IV of LTA ORDER: 0016-02-25-19 along with the surcharges and invoices for the year 2020. Both companies in separate statement the previous day, said that as the result of the settlement, they are in the process of rolling back of the surcharges pursuant to Part IV of LTA ORDER: 0016-02-25-19.

“The LTA and Orange Liberia have agreed that there will be a rollback of the surcharges recently imposed by telecommunications providers pursuant to Part IV of LTA ORDER: 0016-02-25-19,” Orange said.

“Effective immediately, Orange Liberia in consultation with the LTA shall suspend the implementation of Part IV of LTA Order: 0016-02-25-19, pending an orderly roll back of the surcharge under LTA directives and supervision,” the company said. “Orange Liberia extends its thanks and appreciation to the public for remaining calm and patient while the LTA and Orange resolve their differences regarding the surcharges imposed by Part IV of LTA ORDER: 0016-02-25-19.”

“We would like to thank the Liberia Telecommunications Authority for working with the GSM operators to find a solution that is in the interest of our customers and the people of Liberia,” Lonestar Cell MTN said in a statement. “We would also like to thank our customers for their patience throughout this period.

“As part of the rollback of the surcharge adjustments,” Lonestar said, “all customers who purchased bundles between October 8, 2020 and October 14, 2020 will receive the difference in minutes and data between the allocation they received when they bought the bundles compared to the allocation in place before the surcharge was implemented.

“Lonestar Cell MTN understands that these are tough economic times but through it all, we remain committed to always doing our best to provide our customers with the best value for all their communications needs,” the company said.

Orange Liberia, in a message to its subscribers, said that it “will restitute all on-net voice and data to affected customers during this period within ten (10) consecutive days.”

It may be recalled that last week, GSM companies operating in Liberia, Lonestar Cell MTN and Orange Liberia, added surcharges to voice calls and internet data giving limited time of call and internet usage to consumers.  Before the imposition of the surcharges, consumers paid US$1.00 and used 45 minutes to call for three days, and US$2 to obtain 1.2 Gigabytes to browse the internet for seven days.  But when it was imposed, consumers have to pay US$1 for 15 minutes of voice call and US$5 for 1.2 Gigabytes.

The surcharge which has been imposed by the GSM companies contained in an LTA order 0016-02-25-19, introducing floor prices on voice and data calls. Sections 4.1., 4.2, and 4.3 of the LTA order mandate the GSM companies to impose surcharges of $0.008 per minute on voice-on-net calls and $0.00065 per MB (or $0.6656 per GB) on data six months after the cancellation of the widely popular “3-day free calls”.

1 COMMENT

  1. I am wondering how the billing and taxation works…. I am not sure if LTA has access to authentic/real call logs of the mobile operators customers and I am convinced they will believe whatever the operators claim they earn for a given report period. Lord help us if that’s the case!

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