Zimbabwean telecommunications companies are likely to hit a brick wall in their quest for a tariff increase for mobile voice calls as the government believes the struggling economy is over-priced, officials have told ITWeb Africa.

Local telcos Econet Wireless, Telecel Zimbabwe, NetOne and TelOne have written to the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) seeking permission to raise tariffs.

This comes after the government ordered local telcos to cut tariffs by 35% earlier this year.

However, government sources have said the issue has now been referred to the Zimbabwean ICT Minister Supa Mandiwanzira, but stressed that the local economy was over-priced and hence the decision to enforce the tariff cut in January this year.

"It's unlikely that a tariff increase will be approved because a further tariff reduction has already been approved. But it's all now for the minister to decide although he will have to explain to cabinet why a tariff increase should be approved when all other sectors are instituting cost reductions to correct high prices and profiteering in the economy," said a government official, declining to be named.

The Zimbabwean ICT Minister could not be reached for comment on Monday.

In their position paper, submitted recently to Potraz, telcos said "the prevailing economic decline and tight regulatory environment have resulted in subdued performance of the telecoms industry."

They said the introduction of a new costing model had worsened revenue decline in the industry and requested that authorities set aside the 35% tariff reduction which equates to 16 cents per minute on mobile voice calls, and instead institute a 15% reduction from 2014 levels.

"The impact on VAT revenues is that $19 million less per quarter is being remitted to the fiscus and an estimated $40 million less per year in corporate income tax. This results in $120 million lower annual contribution," claimed the telcos.

The government is also likely to dig its heels in over the telcos' request to scrap a 5% duty on data and voice airtime top-ups.