Liberia: Orange Defiant

The Orange GSM Company, a network formerly operated by Cellcom is defiant, refusing to pay surcharges on money it has already collected on floor prices set by the Liberia Telecommunications Authority (LTA) but is poised to pass the burden on to consumers.

The company recently sent out notices to all its subscribers that it will increase data and voice bundles beginning Monday October 5, 2020. But it failed to inform subscribers that it has for the past months been using the very floor-price set by the LTA for which the latter is now demanding the payment of the surcharges accrued under that transaction.

The LTA issued Order 0016-02-25-19 imposing floor prices and surcharges on on-net voice calls and data. A floor price is a minimum fee impose by an authority preventing operators from charging fees beyond that limitation. Thus, the minimum floor price imposed on on-net voice call is US$0.0156 per minutes and US$0.0218 per megabyte for data services.

Data obtained by the New Dawn newspaper indicates that since the LTA Order was introduced both LoneStarCell MTN and Orange made a combined USD104 million as a result of implementing the order. The surcharge portion is 22 million which they are now refusing to pay.

Instead, Orange has presented a picture to put a government, which already looks like its running out of favor with electorates against its people. How did it happened?

It can be recalled that in 2018 the LTA issued Order 0016-02-25-19 imposing floor prices and surcharges on on-net voice calls and data. Before issuing the Order, the LTA got all stakeholders involved and their inputs were considered. The LTA also conducted public consultations to be able to make informed decisions. Thereafter, the Order was finalized and took effect.This led to the elimination of the famous "Three Days Free Calls," by the two GSM Companies last year September.

Subsequently,when the order went in to force, the two GSM companies requested 6 months after which they will pay into government revenue the surcharges collected from the implementation of the floor price.

So the one major effect of the LTA Order was to abort the famous three days free-call as specifically requested by Orange Liberia and other stakeholders. Orange Liberia and the stakeholders allegedly argued at the time that it was necessary to stop the three days free call because they believed it had no economic benefits to their owners.

The New Dawn investigation at the time revealed that the famous three days free call was introduced by Celcom prior to Orange acquisition of Celcom through purchase as reported. It was likely a business strategy employed by Celcom to increase its customers in order to attract potential buyers like Orange.

The three days free calls having lasted for years, thus Cellcom's customers definitely increased, and Cellcom sold to Orange Liberia. Among other things, the three days free call prompted unfair competition and instability between Cellcom (and later Orange Liberia) and Lonestar Cell MTN. As the result, LTA as the regulator issued the Order with the aim to achieve stability, coordination, and efficiency in the sector.

When Orange Liberia took over Cellcom, and with its sole interest to maximize profit, it did not like the three days free call because Orange Liberia felt it could make more eliminating the three days free calls.

The Government too welcomed the idea likely because of its interest to collect revenue on paid calls, unlike free calls. Since there were no conflict of interests between the GSM companies on the one hand and the Government on the other, the LTA issued the Order which charges a floor price and surcharge in consultation with all stakeholders.

Surprisingly, having eliminated the free call and collected revenue from the floor price as the LTA Order, Orange continued to refuse to pay the surcharge fee to the Government of Liberia as provided for in the same Order.

The order also provides that after it comes into force on April 15, 2019, and on the sixth month anniversary of the order, there shall be automatically impose, a surcharge on the on-net voice of US$0.008 per minute, and on the data services a surcharge of US$0.0065 for each megabyte.

But following the publication of this order in 2019, Orange Liberia continued to engage the LTA by numerous letters, outlining its objection to the order.

While still collecting the floor price charge, Orange Liberia took LTA to court refusing to pay the surcharge. The LTAwon the case in the lower court from which Orange Liberia took an appeal before the full bench of the Supreme Court.

Again, while still operating on the floor price as imposed by the LTA, Orange Liberia noted in its inputs during the consultation that the "concept of unlimited, three day free calls" is at the core of its marketing strategy and if stopped, would destabilize the company and create significant risks on its leadership of the market, operations, revenues and taxes.

How did the Supreme Court rule?

So on Thursday September 3, 2020, the Supreme Court, Associate Justice Yussif D. Kaba ruled that the LTA's imposition of surcharges on data services and on - net-voice calls did not invade the Legislature's authority to levy tax, a slap in the face of GSM company Orange Liberia, which had continuously opposed the move.

Associate Justice Kaba went on to say that it was not the intent of the Legislature to preclude the LTA from imposing surcharges on data services and on-net voice calls when it repealed and amended Sections 1165 (Mobile Telephone Usage) and 1022 (B) (2) of the Amended Revenue Code as Amended 2016. So what has Orange done since the Supreme Court ruling?

This paper has gathered that Orange Chief Executive Officer Mr. Mamadou Coulibaly, who was recently a person of interest to the National Security Agency (NSA) in relation to a street protest in connection to the LTA surcharges has since been running Orange from Ivory Coast.

But as stated earlier, the company announced that it will impose the said surcharges, as to if it would increase the on-net voice calls and data apart from what the LTA has set is yet to be seen.

However, it has refused to pay its share of the USD22 million accrued from the combined 104 million and want to start payment from current, where as it has been collected floor price charges since the 3 days free calls ended last year.

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