MNOs, ISPs feeling the pinch


Internet Service Providers (ISPs) and Mobile Network Operators (MNOs) will continue to feel the pinch despite the latest tariff review by the regulator, Postal and Telecommunications Regulatory Authority (POTRAZ), Business Times has learnt.

POTRAZ recently approved a 57% upward review for voice, data and SMS tariffs to catch up with the constantly rising operating costs affecting the telecoms sector.

The application to increase tariffs was done in December last year but only approved last week.

Telecoms sector is citing that the tariff review is just a drop in the ocean on the back of run-away inflation in the market. Business Times is also informed that the foreign currency obligation that should be met by these companies has made it worse on the back of the rising inflation.

ICT Association of Zimbabwe president Jacob Mutisi told this publication that this latest tariff increase by POTRAZ remains marginal; judging by the macro-economic environment.

“This is a marginal increase considering that inflation is at 540%.

This is marginal because remember they have a Forex obligation to pay for their interconnections and equipment,” said Mutisi.

He further said in as much as the increase is marginal on the part of MNOs, the consumer is also going to have a fair share of the pain as income has remained stagnant.

“To the consumer it will hit the pockets because the salaries are stagnant.

These MNOs need the forex which is not readily available in banks,” Mutisi said.

Before taxes consumers will now pay, On-net calls per-minute $1.17, SMS at $0.30 while mobile data per megabyte will be at $0.23 After taxes, consumers are now paying more than the above-stated prices as currently NetOne, Econet and Telecel customers are paying 83c/min for calls, 25c per SMS and 25c/MB.

Tariff thresholds for telecommunication services were last adjusted in October last year using the August 2019 Telecommunication Price Index (TPI) figures.

The current tariff thresholds have been rendered unsustainable as the operating environment continues to deteriorate due to constantly rising operating costs.

Accordingly, POTRAZ found it necessary to review tariff thresholds for telecommunication services by up to 56.64% based on the TPI, for the period October to December 2019 that was computed in consultation with operators.

The new data tariffs, which came into effect on Wednesday last week, came as a result of the significant weakening of local currency which has lost 93% of its value from 1: 2.5 when the interbank rate was introduced in February to the current 1:40.

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