THE Postal and Telecommunications Regulatory Authority (Potraz) last week rejected proposals by mobile operators to increase telecommunication tariffs by between 140% and 200%. Instead, the telecommunications regulator, using cost-based analysis, said voice calls should not exceed RTGS$0,22 per minute, a rise from the current maximum charge of RTGS$0,16. Mobile operators were proposing a voice tariff of an average RTGS$0,40 per minute.
Candid Comment Faith Zaba
The threshold for out-of-bundle data or internet tariffs remains at RTGS$0,05 per megabyte before tax. The refusal by the regulator to more than double the tariffs has generated a lot of debate among stakeholders, with the operators arguing the refusal to effect a sharp increase threatened the viability of the sector, whose revenues have been declining due to spiralling operating costs. Potraz is arguing that it took into account the issue of affordability by t consumers.
The authority is trying to minimise a prices shock on citizens, who are already overburdened by high taxes, skyrocketing price of basic commodities, including foodstuffs, fuel, rentals, which, in some instances, are pegged in United States dollars. The telecommunication regulator also considered the 27% increase in voice traffic registered in 2018.
While we appreciate that the telecomms operators need to run commercially viable operations, they must propose a tariff regime that takes into account the current economic situation. They need to be sensitive to the fact that the proposals were coming at a time when the economy is haemorrhaging due to de-industrialisation and subsequent reduction in disposable income and job losses. There is need to maintain a balance between affordability of service to consumers, more than 90% of whom informally employed, and the operator’s viability.
The current tariff hike is significant considering that salaries have been lagging behind inflationary pressures. Salaries of most Zimbabweans have remained stagnant despite the hyperinflation, with most being paid in RTGS dollars. It is insensitive for the operators to propose an adjustment using the market exchange rates on the current tariffs, without paying heed to changes in traffic movement and cost of provision of the service. This is tantamount to “mugging’” of an already overburdened customer, especially considering that the cost of providing these services is way below the set thresholds, according to the long-run average incremental cost model (LRIC) used by Potraz.
The telecoms companies need to understand the market and their customers, who are hard-pressed financially. They must be sensitive to their customers’ situations. We hope that operators will not deliberately downgrade the quality of their service to force an increase in tariffs.
But more importantly, government must promote competition and allow foreign players into the market. South Africa’s MTN has shown interest in partnering NetOne, but because of greed, negotiations came to naught. With more players and foreign partners, services will improve and the market will determine charges, which, due to competition, will be favourable to consumers.