BEIRUT: The adoption of new tariffs for phone services and subscriptions in Lebanon has caused concern.
Pricing will now follow the dollar exchange rate on the Sayrafa platform, which is about LBP25,200. Prices used to be calculated according to the official exchange rate of LBP1,515.
The tariff raise came into force on Friday.
People woke up on Friday to text messages sent by telecom operators calculating their balances according to the Sayrafa exchange rate, surprised by the value of their balance tumbling to below $1.
In May, the Cabinet approved the decision to increase the tariffs and fees for landline, mobile calls, and the internet starting July 1.
They will be calculated by dividing the previous dollar bill by three and then paying it in Lebanese pounds per the Sayrafa platform rate.
But people are struggling to accept the new prices, despite the help offered to students and security services by telecom companies Touch and Alfa.
Rabih, a 17-year-old student, said: “I had LBP75,000 in my balance, which used to amount to $49 according to the official rate. The amount shrank today to 30 (US) cents.”
Based on comparison tables between the prices in dollars and the prices adopted now, prices have fallen by about 300 percent in dollars, while their calculation according to the Lebanese pound rate shows a significant increase ranging from 500 to 700 percent.
The Lebanese currency has lost more than 95 percent of its value, leading to significant price differences.
The price table circulated by telecom companies shows that a 30-day prepaid card which used to cost $22.7 — equivalent to about LBP34,000 per the official dollar exchange rate — now costs $7.58.
But, if calculated based on the Sayrafa rate, its cost rises to LBP191,000, which means an increase of about 560 percent.
The telecom companies confirmed that the step came in response to the “necessity to maintain the continuity of the telecom sector and the provided services, amid the economic and financial crisis and the increase of the high cost of power insurance for plants, and since this sector is one of the most important pillars of the national economy.”
Activists warned that “audio messages and videos should not be sent when using the 4G service because they will consume all phone data.”
Young people’s phones fell silent, with some preferring to stay at home because the cost of home internet services remains the same.
The Lebanese are thinking twice before downloading a video or picture using the 3G or 4G service.
People relying on this service hesitate before opening any video received. Sending morning flowers and evening greetings has decreased significantly in recent days.
Abbas, a private internet service distributor, said: “We raised our prices but all distributors agreed to calculate their prices according to the rate of LBP10,000 for the dollar instead of the Sayrafa rate of about LBP25,000 to compete with the Ogero service affiliated to the Ministry of Telecommunications and maintain our subscribers. Our prices took into consideration the costs of transportation, generator subscriptions, and employees. I don’t deny that some subscribers decided to opt for the Ogero service because it is cheaper than ours by LBP60,000.
“But they forgot that Ogero is suffering from fuel shortage, preventing it from securing the service around-the-clock. Many operators are forced to turn off their machines as a result of their inability to secure dollars to buy diesel and operate the generators.
“Moreover, Ogero faces problems in installing new internet cables because of the high transportation cost of employees who have to move around between the clients’ houses to offer their services.”
The lifestyle of the Lebanese is undergoing major changes, especially young people who now have to reconsider the time they allocate for talking on the phone and internet use.
Abbas said that coffee shops offering free internet had “significantly raised” their food and beverage prices to provide their customers with this service. “If they start incurring losses, they might start slowing down the internet to reduce its use.”
Rabih said that he and his friends had decided to stay at home to use the home internet for their phone calls and chats, even though the home internet bill had increased from LBP100,000 to more than LBP400,000.
He feared the lifestyle they had become used to might change, and he worried about the state of their education next year if they returned to remote learning.
Telecom services are the only ones falling under the official dollar rate. Other services are priced based on the black market exchange rate, while the remaining subsidized medicines are in line with the Sayrafa platform rate.
But the tariff increases have not triggered any reaction in the streets as happened in 2019 when the Ministry of Telecommunications discussed the possibility of imposing a $6 fee on WhatsApp.
It backtracked on this plan in response to public pressure.