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Zim telcos start price war

By , Journalist
Zimbabwe , 06 Jul 2015

Zim telcos start price war

Zimbabwean telecoms companies have entered into a price war, offering voice and data tariff promotions amid growing reports that they have cut employees’ salaries and also moving in to pay wages using airtime credits.

Econet Wireless was the first to offer a promotion on its data access bundles and on Monday, Telecel Zimbabwe said it would this month launch a promotion that will give 60 minutes of talk time for $1 top-up.

“Telecel’s decision to offer more value through these promotions to our hard-pressed customers is part of a wider price leadership strategy, which is aimed at ensuring our customers can enjoy affordable mobile services and products,” said Telecel Zimbabwe chief commercial officer, Nkosinathi Ncube.

Another promotion will also give subscribers free talk time during weekends if they top up with $4 airtime during the week. The two telcos have reportedly moved to cut employee salaries.

Econet Wireless has not confirmed this but said in a previous statement that it had frozen new investments. Angeline Vere, the newly appointed chief executive officer of Telecel Zimbabwe, told ITWeb Africa in an interview that the company was not cutting employee salaries.

“We are not cutting employee salaries. We have not written a letter to employees,” she said.

This followed a note that has widely been circulated on social media platforms in Zimbabwe saying Telecel Zimbabwe was cutting employee salaries and also making part payment using airtime credit.

“Kindly find below the proposed initiatives by management to reduce the staff costs by at least 25%,” says the note.

Telecel is allegedly seeking to give employees options such as reduction of salary and benefits by 20%; deferment of salary payments, part payment of salary in the form of airtime and choosing to work short periods of four days per week.

Sources told ITWeb Africa that the company may have used its recent earnings to pay for its licence renewal obligations for the month of June. Telecel said last week that it had made its payment instalment for June in line with an agreement with the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz), whose board has been dissolved by ICT minister, Supa Mandiwanzira.

“If the decision to cut employee salaries is true it will likely be in response to strained financial position after payment of the June salary instalment. It’s difficult to determine if it’s a decision that has been approved because there are legal implications that will come with such a move in terms of labour laws,” said a source.

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