In Sierra Leone: Mobile Operators have good reasons for Tariff Increase to Improve Connectivity, Sustainability

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In a compelling statement issued at the Media Retreat and CSO Engagement; Mobile Operators across Sierra Leone said they have good reasons for Tariff Increase to Improve Connectivity and Sustainability.

Speaking to newsmen, the telecommunications companies said their sector has been one of the key drivers towards the development of ICT in this Country and their contributions over the years towards the implementation of the President’s manifesto remains enormous.

They said their apparent commitment can be seen in being the biggest taxpayers and one of the largest employer and CSR Contributor of this Country.

Over the years, they added, they have expanded their networks to reach remote areas with telecom services resulting to the construction of over 1000 sites and achieving a population coverage exceeding 90%.

The Companies went on that they have launched 4G and 4G+ technologies for enhanced data speed and today their internet prices remain one the cheapest in the sub-region.

“We have created job opportunities for over 100,000 Sierra Leoneans with direct and indirect employment and remain a strong pillar for CSR and sponsorships in the country. We have launched foundations, Data, learning and e-learning centers, and have provided support for every facet of society in the media, entertainment, sports, entrepreneurship, and many other industries in this Country. We have also renovated hospitals, health centers and supported disability and vulnerable members of our society, we have also built many schools, equipped classrooms, supported artist, football clubs and premierships, the national football team and provided learning courses nationwide to both primary, secondary, and tertiary institutions” they stated.

In the press statement, the Companies said: “All of these contributions and achievements from our sector could not have been materialised without our vast collective investments. 

For us to continue on the same trajectory, our sector must be able to continue investing in infrastructure, making devices available and affordable and most importantly promoting a mutually beneficial relationship amongst all sector players and our valued consumers.

Whilst we understand the global economic challenges that affects the fabric of every nation today; our sector is at an even worse position with the resultant effect being an exponential hike considering the cost of providing our services whilst trying to cope with the devaluation of our currency. This has a fundamentally negative impact on our business and remain an impediment to our investment aspirations.

Whilst all other businesses have the freehand to increase their costs reflective of inflation and the devaluation of the Leone against the USD and other international currencies, our tariffs remain stagnated.

Since our last tariff adjustment in 2017, the combined increase on some of our key cost variables stands at an alarming rate of 698% negative. These include the following:

Increase in Foreign Exchange rate against the Leones

The present days value of the UD Dollar is at Le. 18,000 (Old Leones) to $1. This records an increase of 148% since the last GSM tariff change in 2017 when the exchange rate was Le. 7,258 (Old Leones) to $1. 50% of our cost goes to CAPEX which is in dollars. How do we continue investing and sustaining our business when 50% of our CAPX alone has increased by 148% whilst our selling price remain the same?

Increase in fuel cost

Fuel price is at Le. 25,000 (Old Leones) against Le. 6,000 per litre 5 years ago when our sector tariff was last reviewed. This records a colossal increase of 317% for a product that account for about high proportion of our total Opex.

Cost of Electricity Tariff and cost of powering our sites

Even electricity tariff which is a similar utility service and a cost driver for our business has witnessed a significant increase of 78% from Le. 1,890 (old Leones) to Le. 3,364 (New Leones) as at July, 2022.

Cost of Internet (Zoodlabs)

Previously, the cost of 1 Mbps data from Zoodlabs was $ 8. Today, it is $13 per GB recording 63% increase and continue to increase when the Leones value of the USD increases. To make matters worse, Zoodlab’s price is not only fixed in dollars, we are charged at the commercial bank rate.

Cost of Terrestrial Fiber (Leoncom)

The cost of terrestrial fiber from Leoncom has also gone up significantly.

The Cost of Site Construction Materials (Steel and Cement)

Whilst the cost of Cement per bag and steel per ton were Le 65,000 and Le 6,000,000 (Old Leones) in the past, they presently stand at Le. 145,000 and Le. 11,500,000 respectively accounting for 92% increase.

Inflation

Inflation as at today stands at more than 20% and could increase to 30%.

Although we have struggled to absorb these increases over the years, the prevailing challenges is stifling our businesses and the situation is no longer sustainable.

If our sector is left unattended to address the challenges we face today, the effect will be such that jobs will be lost, QoS will be impacted, our contribution towards CSR will be grossly reduced, rural sites that are heavily subsidized will be shut down.

I would like to emphasize on the criticality and the urgency to salvage our cry for tariff review, as this will foster and strengthen the sustainability of the telecommunication sector to increase our contribution to the development of ICT, whilst at the same time impacting the population of Sierra Leone and improving daily lives.

We therefore call for the immediate intervention of our regulatory stakeholders as our ability to further invest in Sierra Leone is dependent on resolving our prevailing challenges.

In conclusion, our sector remains committed towards providing the best telecoms services in Sierra Leone and assure every Sierra Leonean that together, we will fight and overcome the effect of the global economic challenges to become stronger and better”.