Potraz sets floor prices for mobile operators

Considering that the Internet penetration rate is now at 50,1 percent, the implication (according to Potraz) is that out of every 100 people, there are 50 Internet subscriptions. It is therefore prudent for businesses to think of Internet access as a strategic imperative and strive to offer convenient, mobile-based services and solutions to their clients

Christopher Farai Charamba Business Reporter —
Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has set floor prices for voice and data for bundled services including promotional packages.

A floor price is a minimum effective tariff chargeable per minute of voice calls and per megabyte of data.

According to communications by Potraz to mobile operators, the floor price for traditional voice services shall be set at 12c per minute while the floor price for data shall be set at 2c per megabyte.

The Regulatory Determination on Floor Prices for Voice and Data for Bundled Service Packages Including Promotions will come into effect on January 9, 2017.

“All relevant licensees offering promotions and bundled service packages must review their offerings in the market in line with the floor prices set and discontinue all current offerings that are not in line with the floor prices by 9th of January 2017,” said Potraz.

According to Potraz, “the floor prices shall go a long way in addressing the apparent under-pricing of voice and data services that was characteristic of data bundles and promotions that were being offered by operators.”

In July last year, Potraz suspended all promotions citing the fact that data bundles and packages offered by telecommunications companies resulted in situations where data services were priced well below 1c per megabyte.

This they said, increased data traffic significantly without a corresponding growth in revenue realised by the operators.

“Overall revenues realised from the telecommunications sector” Potraz said, “continuously declined at the rate of 10-12 percent per quarter since the beginning of 2016.”

The new mandatory tariffs are likely to affect NetOne OneFusion customers the most, whose data tariffs are currently priced below 2c per megabyte for all the various OneFusion plans.

Econet and Telecel subscribers are set to benefit from the new floor prices as their monthly data bundles are priced between 2-3c per megabyte depending on the option selected.

In addition to the floor price for voice and data services, Potraz has invited mobile operators to submit proposals on a premium tariff to be charged on data used for OTT voice calls. This would see customers charged a levy for WhatApp calls, Viber calls and similar services.

According to the regulator: “The advent of OTT services has seen mobile operators experiencing revenue reductions as a result of the substitution of voice and SMS by Internet Protocol (IP) voice and messaging services of the international OTT players who ride on the networks of local operators

“The growth of data revenue has not been sufficient to compensate for the sharp decline in voice and SMS revenues.”

In September last year, Potraz held a consultative workshop on OTT services. Guided by the recommendations from the consultation process, the authority is considering allowing operators to charge a premium rate on data used for OTT Voice calls.

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  • jimmy toole

    The reasoning does not make sense in fact more than anything it is anticompetitive and I suspect it is meant to protect government entities from competition! they should be setting a ceiling price not a floor price.

  • TitusO

    So the solution is to make bundles more expensive.

  • the 1st Hokage

    Operators build their financial models around those “promotional” tariffs and realise that their business would remain viable. They are not complaining. Then you have a regulator that comes in and insists that they increase their tariffs?? I can’t find the logic in this. And then a levy on WhatsApp calling? Supa Mandiwanzira wenyu murikumuona?

  • Ziyabheda

    Disband this Potraz nonsense. How dare they are reversing pro poor policies that service providers have crafted for their clients? Increasing tarrifs for a service provider who has not asked for the increase,surely??!!!

  • magas

    this is really unbelievable, how can a regulator disadvantage customers. isnt this body there to protect us customers. now mobile operators can charge any price taking advantage of customers

  • Sifanele Dlamini

    This makes no sense at all. Data in Zimbabwe is overpriced anyway compared to regional prices. Net One has not complained about the effects of One Fusion why set a Ceiling price surely you not taking into account the fact that people’s income has been depleted hence the move to cheaper WhatsApp calling.

  • moyo

    Potraz gets a slice of the sales done by the mobile operators, that is why Potraz wants to maintain high prices.
    The proliferation of regulatory authorities in Zimbabwe such as Potraz,ZERA,etc is a burden on the economy and the consumers because the regulatory authorities donot generate their own money ( they donot produce goods or offer commercial services) but rather survive and thrive by levying businesses, who then pass on the costs to consumers.Minister Bimha has another regulatory authority for standards in the pipeline,which will further add to the cost of doing business in Zimbabwe.

  • Sadombo

    Oh my God this is crazy, with people like Ozias Bvute at POTRAZ, we are guaranteed of chaos and drama, he left a trail of mess at Air Zim, Zimbabwe Cricket and MetBank

  • Phato Sthole

    We’re preaching everyday that we need to work together to reduce the cost of business so we can produce products and services at the least possible costs so we can compete favourably in the international market. This calls for savings everywhere and in any which way we can. Communication is one of the major drivers of costs in business and I was of the understanding that it is govt wishes to have different economic players play a part in this. Now this??? Imagine the amount of money saved on local and international calls when we ride on OTT calls. This in essence has been lost revenue to Potraz as they get a slice off of these calls. Everywhere in the world tech and communications companies are feverishly working to reduce prices and therefore attract users to their products and services but NOOO not in Zim!! I just need a couple of questions answered, to what end is this move? am I wrong to assume that more revenue for Potraz, means more money in the hands and pockets of those that run the entity? Is it too much to ask that maybe we go back and examine the reason why this institution was put into place? what are the investments that they have done other than being a slush fund for the powers that be? Where the hell is Supa and what does he have to say about this or he checkmated himself when he took that loan for the big car that he as a minister should be using and not the Mazda Demios that us mere mortals have to make do with? If the comms companies are not complaining about lost revenues then why on earth is Potraz concerned about it if not because of lost revenue of their own? We are choking here and they in fact go and increase the pressure of the boot on our necks? So who is or is not patriotic after all? This whole Potraz thing is a farce.

  • Gushungo WekuGP

    Kupa vanhu mapositions vasina basa rekuita honai zvavanoita to justify their salaries!