Lebanese Call for Cellular Boycott
By Eric Lin, Wed Jul 07 00:00:00 GMT 2004
Consumer advocates, business leaders and even politicians in Lebanon are calling for all citizens to boycott mobile phone use on July 15 in protest of high prices.
Subscribers in Lebanon pay at least twice what their neighbors pay for minutes. The Consumers Lebanon Association was left with no option to fight this after negotiations with the government, which runs the cellular networks there, rejected a proposal to reduce rates. The Philippines, which was considering an SMS tax to shore up their deficit, may have been following Lebanon's lead. Instead of taxing cellular networks, Lebanon actually owns the network, and makes profits of about $700 million which it uses to pay down its deficit (currently at about $3 billion).
Lebanon isn't just paying more than its neighbors. Lebanon pays two operators $4 million each per month to run the national network, bringing total revenue to about $800 million per year on 850,000 subscribers. This means ARPU is about $950 per year, that's high for any country, not just the Middle East.
Groups in Lebanon are urging subscribers to follow the model of a few African countries, organizing a one day boycott of all mobile phone use. South Africans made a similar attempt to protest rising per minute call charges, but the lack of follow up does not bode well. Nigeria had a slightly more successful effort. An estimated 50% of subscribers there boycotted calls for one day. The networks laughed saying that hurt, at most, 4% of their daily revenue, however it was enough to get the government's attention. The Nigerian Communication Commission told the operators to introduce per second billing as soon as possible and is making other investigations into carrier practices. The Lebanese are also complaining about per minute billing, claiming it raises phone bills up to 30% and want per second charges instead.
A boycott against a government is unlikely to be as effective as boycott against a private operator. At least in Nigeria's case a government agency could step in to represent the people. No such agency can do that for the Lebanese. If the boycott causes the Lebanese to lose a significant amount of daily income, will it take notice and drop the rates, or will it continue to raise them looking to make up for lost profits?