The mathematical formula for the prices of Alfa and Touch in Lebanon was presented at the end of May during a press conference at the Ministry of Telecoms. (Photo P.H.B.)
BEIRUT — The new telecommunications prices come into effect Friday. That means all subscriptions must be paid in dollars using Banque Du Liban’s Sayrafa rate, which as of Thursday stands at LL25,200 to the dollar.
In its final session before entering caretaker mode on May 20, Cabinet decided to increase the telecom tariffs for Ogero, Alfa and MTC starting 1 July.
The sector's leaders consider the new pricing scheme to be a necessary step, due to the depreciation of the lira against the US dollar on the parallel market and substantial increases in the cost of fuel, used to provide telecommunication services, as the country has suffered an unprecedented economic crisis since October 2019.
"With so far $70 million in revenues for $293 million in expenses, the sector would collapse without a change in tariff policy," caretaker Telecommunications Minister Johnny Corm told L'Orient-Le Jour last week.
The decision also aims to phase out 2G network service , and part of 3G, in favor of 4G. This transition "has already begun and should take between four and nine months," said Corm.
The price increase has not yet provoked protests after months of panic among phone subscribers regarding possible price increase. The "WhatsApp tax," proposed in October 2019, is considered to have sparked nationwide protests, which began on October 17 and continued for months. The tax was abandoned shortly after it was announced.
Rumors circulated this week about a potential postponement of the new tariff regime, which Corm denied Thursday.
Alfa said on its website Thursday that it will not accept payments on Friday or Saturday "due to the setting of new prices," neither online nor in stores. Like Touch, Alfa warned its subscribers this week that their remaining balance will be converted to dollars starting today, based on the BDL’s Sayrafa rate applicable on the day of purchase.
The new prices will not be a direct exchange at the Sayrafa rate. The original dollar rate (at LL1,507.5-US$1) will be divided by three, then multiplied by the Sayrafa rate.
For example, set Thursday via Sayrafa at LL25,200 against the dollar, the cost of a prepaid recharge card, valid for one month, is LL191,016 — instead of LL34,265, as it was the month before. In dollars this is a decrease from$22.73 at the LL1,507.5 rate to $7.58 at BDL’s Sayrafa rate.
The cost of minutes per call made via these top-ups has been reduced in dollars but increased in lira — from $0.25 (LL376) to $0.08 (LL 2,016 at the same rate). SMS messages will cost $0.02 (LL504), compared to $0.05 (LL75 ) previously. As of Thursday, the price of 500 megabits (MB) has fallen from 10 dollars (LL15,075 ) to 3.5 dollars, equivalent to LL88,200.
For state-owned telecommunications company Ogero, the price of calls is mostly the same, while internet prices will increase by an average of 2.5 times.
On May 26, caretaker Telecoms Minister Johnny Corm, Director General of Ogero Imad Kreidieh, and the chairmen of the two mobile operators Jad Nassif and Salem Itani presented the new telecom tariffs as approved by the government.
Following the presentation Itani, the chairman of Touch, described the new tariffs as critical for the survival of the telecoms sector. Corm told L’Orient Today on May 20 that total revenues are expected to increase to $350 million from $70 million when the new prices are implemented.
L’Orient Today asked on May 26 whether customers should expect further rate increases soon, since the operators are basing their forecasts on a reduced cost structure. Itani answered that “as long as tariffs are linked to Sayrafa, then rates should not change.”