The action by the Liberia Telecommunication authority to introduce additional surcharges ( regulatory fees) on voice on-net calls and mobile data services is expected to increase the cost for browsing and calls in the midst of a struggling economy.
In a rather ambiguous release, LTA said it has agreed with mobile network operators minimum on regulatory fees instead of surcharges. The LTA release added, “this minimum adjustment will slightly affect voice and data bundles beginning April 1, 2021. We remain committed to providing affordable services to consumers in a responsible regulatory environment.
However, the release did not state whether the new minimum adjustments would be higher or lower. Pundits suggest that if the adjustments were lower, the LTA would have no problem outrightly saying that it was dropping charges. “So we can safely assume that the minimum adjustments could mean an increase in the voice and data tariffs,” customers of both mobile network operators (MNOs) say.
Sources in the telecom industry have disclosed that the plan by the LTA is not different from last year’s price floors for on-net voice and data services, which caused a serious public backlash that led to its withdrawal.
While industry players and regulators (LTA) remain tight-lipped on how much the proposed increase would be, said the increase will no doubt suppress consumers’ ability to afford the mobile service.
“LTA’s action, expected to come into force on April 1, 2021, will definitely increase the tariffs on voice calls and data bundles greatly, not slightly as expected. While the prices for a dollar card will be the same, the value for data will not be the same. More will be spent on browsing and callings,” the sources added. “LTA’s latest move will affect 90 percent of telecommunication subscribers but mostly high earn subscribers, the ones that recharge regularly.”
The sources added that LTA seems not to have any real justifications for imposing this regulatory fee and are yet to provide any concrete reason why to raise additional revenue from this regulatory fee.
US Gov’t Warns Against LTA’ Surcharges
Meanwhile, the US Government through the Embassy in Liberia in a communication to the Minister of Finance Samuel Tweah early Jan. 14, 2021, warned that imposition of surcharges would further increase the already economic hardship facing Liberians.
“We appreciate and share your concern for the plight of ordinary Liberians whose high cost of living have only risen during the COVID-19 period,” said Alyson Grunder, Deputy Chief of Mission of the U. S. Government in Liberia.
“The government’s stated commitment to its Pro-Poor policy agenda, particularly efforts to increase broadband penetration, would be undermined. In addition, the imposition of a surcharge on voice and data prices, already quite high in Liberia compared to the region, will drive the country’s affordability ranking even lower, pushing away potential investors to less expensive, better-connected markets,” added Grunder.
According to Grunder, implementing the surcharges as currently proposed will significantly threaten various programs being supported and implemented by the U. S. Government and other international donors, given the added communication costs and likely loss in mobile phone network coverage around the country—again, especially in the rural areas where many of the poor life.
“As you are aware, access to telecommunications services, both voice, and data can mean the difference between life and death when making emergency health calls, and increase business productivity and customer service can make on-line education possible when in-person schooling is not available and can alleviate liquidity issues through mobile money options. To participate in modern life, people need access to telecom services,” Deputy Chief Grunder said.
Deputy Chief Grunder said these new charges would come at a particularly difficult time for Liberians who are struggling to recover from the economic downturn caused by COVID-19. Because Liberians will have to pay more for conversations and data, they will likely limit their phones, making LTA’s desired revenue boost unlikely.
“As well, network coverage around the country could well decline as a result of decreased usage, since many cell phone towers, primarily in the rural areas where many of the poor people live, are already unprofitable,” Deputy Chief Grunder said.
Grunder furthered that the Embassy feels compelled to convey their apprehension regarding the reported intention of the LTA to impose surcharges on telecom prices, an action which will significantly increase the everyday cost burden for Liberians as they seek to communicate with each other and with the world.
“We urge also understand that the mobile network operators or MNOs are open to exploring alternatives with your government that would meet fiscal needs without breaking current business model; we urge additional consideration of their proposals. A positive consensus between regulators and industry could lead to the generation of needed revenue without opening the government to risk of international investment disputes,” Deputy Chief Grunder said.