Potraz defends tariff hike, as Econet takes the lead

New regulations will also allow telecom firms to charge a premium for OTT services such as Whatsapp calling

New regulations will also allow telecom firms to charge a premium for OTT services such as Whatsapp calling

Business Reporter—

The Postal and Telecommunications Regulatory Authority has justified the new minimum charges for voice, data and bundled services as critical to halt down a spiral in revenues of the telecomms sector due to the negative impact of grossly discounted service tariffs.

Potraz said that it had a mandate in terms of the Postal and Telecommunications Act to ensure sustainable and consistent provision of domestic and international telecommunication services.

The telecoms regulatory authority said revenues of mobile network operators have declined at the rate of between 10 percent and 12 percent since January this year due to low data prices, over the top services and falling voice revenues due to OTTs.

New regulations will also allow telecom firms to charge a premium for OTT services such as Whatsapp calling, which have hitherto been free of charge.

“Therefore, the introduction of floor prices will ensure consistent and sustainable long-term provision of services to all Zimbabweans,” said Potraz director general, Dr Gift Kallisto Machengete, adding that this will not stifle innovation nor burden consumers through high prices.

As a result of the moves by Potraz, the cost of mobile internet has risen, especially considering internet users would pay only $1 for weekly data bundles to access social media.

On Econet whic was first to effect the price increase, 5MB will cost 50c including a bonus of another 5MB accessible through the network’s WiFi hot spots. A dollar will double the data bundle to 10MB plus a similar amount of data on the operators hotspots while one will have to fork out $50 for 2,5 gigabytes plus a similar bonus data amount. This took effect from January 11, 2016.

Instead of bundled services and discounted data services mobile internet users used to enjoy through promotions, users will also only gain access to social media relative to the data they purchase.

Potraz said that the floor prices do not only focus on propping up revenue, but also on sustaining long-term provision of service to consumers. Floor prices prescribe the minimum tariffs operators should levy per voice call or megabyte.

“Potraz’s mandate is to promote innovation. Therefore, the authority has a duty to capacitate innovation drives in line with the global technological developments by creating an enabling environment for the sector to provide innovative services, failure of which there would be no innovation to talk about,” Dr Machengete added.

The new floor prices came into effect on January 9 with Potraz having directed operators to switch to the new rates with effect from Monday.

The regulator said it aims to keep the price of data as low as possible while ensuring sustainability of the sector and protection of consumers.

“The authority’s intention in setting floor prices is, therefore, to maintain a delicate balance between service affordability by consumers and operator viability.”

Potraz said it is currently carrying out studies to review the cost models used in tariff setting, which were designed in 2014 to ensure fair pricing. The results of the study will guide new tariffs.

The regulator also said it is consulting stakeholders in the sector and conducting research on the impact of OTTs and how to reduce their negative impact on sector viability while harnessing their advantages in line with global trends.

Earlier this year, Potraz suspended all promotions arguing that data bundles and packages offered by telecom operators resulted in situations were data prices were set at less than 1c.

Resultantly, there was significant growth in data traffic, but without corresponding growth in revenues.

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  • Sadly Zimba

    Its cheaper to catch a combi and show someone a video than to send it to them using mobile data.

  • Pasi neZimra

    why put a floor, just put a max prices kuzasi zvosotana zvega

  • Tawedzegwa

    Apparently Minister Supa Mandiwanzira has just suspended the Potraz increase. No doubt the political downside for Zanu-PF and its puppet Potraz management was considered too much for the moment, and Supa may gain some short term political kudos while government finds others sources of revenue and means to impede free expression via social media. We shall expect more details from the Herald tomorrow with a twist and excuses presenting Zanu-PF as the good guys for a problem they created in the first place!

  • Cecil Roars

    I am quite confused with the thinking of our regulator. If, as operator I would like to charge nothing for my services and can still sustain such a service, i see no problem as long as my behaviour doesn’t violet competition laws. This seems to have been the case in Zimbabwe as 3 operators have all been doing the same. None reported the other to the regulator. Secondly, I think this regulator seems to have an upside down understanding of its role. It must set not the minimum charges but the maximum. That way it would protect the consumers from high tariff charges. The idea of setting regulators is to protect the consumers mainly and not the operators. I have also ready that this regulation was done by asking the 3 operators for how much the so called floor price was supposed to be and then they set it up based on the consensus of the operators. That is not regulation at all. That appears like allowing this cartel to set prices and endorsing them. It’s a shame regulator. It should re-think how regulation is done.

  • Zougar

    The truth of the matter is in zimbabwe everyone is out to make a buck weather its government ,zinara,potraz,or the roads department.. i bet u they sit and have meeting n say how can we take money from people today?

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