Financial experts warn that the waiver of fees for sending money by any telecommunications service provider can reduce government revenue collected on those waived fees.
Monrovia – Orange Liberia has been accused of engaging in unhealthy business practices after waiving fees for mobile money transfers. Last month, Orange announced a new promotion offering free transactions on its Orange Money service.
In response, Lonestar Cell MTN also announced it would waive all service fees. However, customers of Lonestar claim that the company continues to charge fees.
Financial experts warn that the waiver of fees for sending money by any telecommunications service provider can reduce government revenue collected on those waived fees. Such promotions, they argue, can decrease the company’s income by the amounts waived, leading to a reduction in corporate income tax and other regulatory charges.
“This is not healthy for business. Although the LTA cannot regulate money transactions, this calls for the Central Bank and the Liberia Revenue Authority to intervene. This could affect all parties,” a financial expert commented on the issue.
When contacted, both Orange and Lonestar did not respond by the time of publication.
Following previous incidents, including a cyber-attack and allegations of bribing former government officials, Orange appears determined to become the dominant GSM company in Liberia.
Last week, the Liberia Telecommunications Authority (LTA) issued a 14-day ultimatum to both Lonestar MTN and Orange Liberia, requiring each to pay a fine of $300,000.
The LTA stated that the fines are based on four counts of serious regulatory violations, including a floor price violation and the refusal to submit critical data with revenue implications. The floor price is a regulatory tool used to stabilize a declining market by setting a minimum price.
At the Ministry of Information press briefing on Thursday, acting chairperson of the LTA, Abdullah Kamara, explained that in 2019, a minimum consumer package price for both data and voice services was established to prevent price wars between providers. He noted that both companies engaged in competitive strategies aimed at attracting more consumers by offering more minutes per dollar at prices lower than the market standard.
Kamara stated that these violations prevented providers from expanding their networks, leading to the decommissioning of towers nationwide and the laying off of employees. The floor price intervention, he added, stabilized the sector, increased revenue, and enabled providers to expand their networks and innovate.
“A shrinking telecom landscape is called predatory pricing,” Kamara said. “It looked good to consumers, but it led to too much traffic on the networks, too many dropped calls, and generally poor quality of service, with revenue on a sharp decline.”
Kamara also highlighted issues with cross-border connectivity. He noted that Orange Liberia acquired a cross-border connectivity license with the Ivory Coast from the LTA in violation of their license. The company used the service during the March internet disruption and still has it at their disposal, violating LTA regulations.
“LTA discovered three new unreported links belonging to Orange, two international and one local. The LTA has not been informed by Orange, and this too is in direct violation of their license. Data collection from these links cannot be verified unless they are indeed reported and permission is granted in writing from the LTA,” Kamara said.
“These violations are grave and compromise our ability to monitor the sector effectively. We hope these fines will curb these actions immediately,” he added.
