08 November 2019
Prior to the watchdog’s intervention, the operators introduced campaigns offering subscribers three-day unlimited calls for US$1
The Liberia Telecommunications Authority (LTA) has waded into an ongoing price war between Orange and LonestarCell MTN, which dates back to 2012 with the former owner of Orange, Cellcom GSM.
Prior to the watchdog’s intervention, the operators introduced campaigns offering subscribers three-day unlimited calls for US$1.
“The predatory price wars have stifled the growth of the sector and has led to a significant drop in revenues collected by the government that could be used to provide social services, among others,” the LTA said.
Both operators also came under fire because their anti-competitive behaviour has resulted in market instability.
According to official figures released, between 2014 and 2017 the market lost US$49m to price competition after gross revenue dropped from US$150 in 2014 to US$101m in 2017.
“The LTA measure is in response to call for intervention by MNOs to stop predatory pricing wars which has stifled the sector growth and plummeted revenue significantly,” said LTA chairman Ivan Brown.
“Mobile network operators were forced to sell packages below market costs and were clearly not profitable. The promotional packages were sold at the cost of diminishing revenue to providers.”
The regulator further directed the operators to maintain a floor price that would limit the number of minutes available to subscribers.
It said following consultation, both players agreed to charge call minute at US$0.0156 per minute while a megabyte of data will now cost US$0.0218.
Operators have since readjusted their pricing and their campaigns.
LonestarCell MTN said its subscribers can still enjoy the US$1 for three days offer, but it has capped the call duration to 45 minutes within its network and 10 minutes for calls made to other networks.
“So, effectively, you can buy a dollar $1 and call for three days as you used to but with a reduction in the allotted minutes,” said Christal-Dionne Reeves, corporate communications and CSR manager for LonestarCell MTN.
