Starting from July 1, which is tomorrow, the decision of the Council of Ministers No. 155 issued on May 20 will come into effect, which mandates an increase in the tariffs for telephone and internet services, leasing line services, virtual network services via optical fiber, copper networks, and wireless networks for individuals, businesses, and companies, as well as wholesale services for licensed internet service providers and data transport services.
According to this decision, the Council of Ministers approved the Ministry of Communications' proposal to— first— reduce subscription fees and the per-minute charge in US dollars for postpaid services on the two mobile networks starting June 1, which must be paid at the Sayrafa platform rate. The monthly subscription fee was modified from $15 (based on an exchange rate of 1515 LBP) to $5 (based on the Sayrafa rate, approximately 125,000 LBP), which the Ministry of Communications considered a 66.67% reduction. The cost of a mobile call minute was also adjusted from 11 cents (based on an exchange rate of 1515, approximately 165 LBP) to 4 cents (based on the Sayrafa rate, approximately 1,000 LBP).
Second, it was proposed to reduce the value of prepaid cards in US dollars on the two mobile networks to be paid at the Sayrafa rate, adjusting the cost of a mobile minute from 25 cents (based on the original dollar exchange rate of 1515, approximately 375 LBP) to 8 cents (based on the Sayrafa rate, approximately 2,000 LBP).
As a result, the new bills will be five times higher than the old bills, meaning that someone who was paying around 100,000 LBP will incur approximately 500,000 LBP in cellular communication bills after July 1.
Just hours before the new tariff comes into effect, the Ministry of Communications informed prepaid card holders that "starting July 1, the value of the balance will convert from Lebanese pounds to US dollars by dividing it by the Sayrafa rate." Why? Because back in early March, the two mobile companies informed all holders of "Alfa" and "Touch" prepaid lines that their balance recorded in dollars would be "LBP-ized," meaning that someone who had, for example, $10 found 15,000 LBP instead after the balance was calculated based on the official dollar rate (1500 LBP). At that time, the Ministry of Communications relied on a consultation from the advisory board at the Ministry of Justice to convert the balance value from dollars to pounds, but the ministry did not inform the advisory board that this "conversion" was temporary or transitional until the fee increase occurred, to revert back to being calculated in dollars based on the Sayrafa rate.
At that time, the ministry, as well as other government components, feared a new popular uprising similar to the one that occurred when former Minister of Communications Mohammad Choucair attempted to impose a 6-cent tax on the "WhatsApp" app, which led to significant public outcry. Thus, the decision to raise tariffs was postponed until after the election process, and the Ministry of Communications' request was presented in the last cabinet meeting, outside the agenda, before the government transitioned to caretaker status.
Now, the two mobile companies are informing subscribers of their decision to revert to "dollarizing" the balances of prepaid service users. This means that anyone who tried to preempt this decision by doing digital "online" top-ups for more than a month will have to pay the price difference from their purchased balance, effectively reducing their credit. This is seen as a form of a "masked haircut" that the low-income individuals will bear the cost for, particularly those who charged their lines for longer than usual, considering that the stored units on the phone are rights reserved for their owners, whether in terms of the number of minutes or in their value. However, the Ministry of Communications decided to penalize the poor, despite the fact that the "accused" are the merchants and monopolists who charged a few lines but at astronomical amounts through "online" means, believing they could sell these stored credits and benefit from the price difference.
Thus, it would have been possible, according to the techniques available to both companies, to distinguish between individuals who charged their lines to save some money and merchants who did the same to make a profit, so as not to apply this "haircut" indiscriminately. Evidence of this lies in the 2022 budget proposal, where the ministry acknowledged that "some traders or individuals have recently bought recharging cards from both operating companies to store them and later sell them at inflated prices," and it allowed for "the reimbursement of the paid amount." It is likely that the ministry will deactivate these cards if they are not used after July 1.
The real chaos arose by allowing some lines to be charged with millions of dollars for commercial purposes surpassing market needs, while both companies are fully aware that this surplus would be available to traders and monopolists. This is what happened, leading to the low-income individuals paying the price for this price manipulation. One expert stated that both companies handled this matter similarly to how banks mishandled deposits, as they permitted a small number of lines to be charged with over $300 million, thus participating in a "selling conspiracy" and preparing to implement the haircut and reduce the value of the existing balances on subscribers' phones.
In conclusion, the cellular sector faces one setback after another, with the Minister of Communications, Johnny Qarm, not hesitating to indicate that over 26% of subscribers, approximately one million subscribers, will make fundamental adjustments in their consumption of cellular services, especially data, while maintaining the same consumption level is required, especially given the challenging circumstances in Lebanon, knowing that Lebanon incurs between $4 and $6 million annually to secure its internet capacities.
