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Zimbabwe telcos given green light on 50% tariff increase

By , Zimbabwe correspondent
Zimbabwe , 17 Feb 2023

The Zimbabwe Postal and Telecommunications Regulatory Authority (Potraz) has given telecommunications companies the go-ahead to implement a 50% tariff increase, ahead of a further 50% price hike in April.

The regulator justified the increases saying telecommunications have been operating below profitable thresholds, despite the apparent dollarisation of mobile money transactions.

Gift Machengete, Director-General of Potraz, said the increases were necessary to prevent excessive pricing by operators, and “if left on their own, they can charge whatever price they wish to charge.”

“As a regulator, we have to fix the tariff so that they cannot just charge whatever they want. In order to do so, we need to then use a scientific method of coming up with tariffs, and a method that will also satisfy the operators that the tariffs are fair on their part,” said Machengete.

Pan-African tech firm Liquid Intelligent Technologies said the hikes were long overdue because telcos were operating “under desperate and untenable conditions which have resulted in the business costs surging in line with exchange rate fluctuations.”

Operators complained that network expansion plans have had to be stalled and, along with electricity supply challenges, have resulted in dropped calls and lower levels of network availability.

Liquid released a statement confirming the 50% industry-wide tariff increase with immediate effect “and another 50% effective April 01, 2023, for the products and services.”

The statement added: “For us to continue providing you with the best possible quality of service, there is a need for constant upgrading and improvement of the network infrastructure.”

Econet Zimbabwe also welcomed the increase and said it would help to cushion the operating costs linked to the country’s galloping inflation. The company added that prior to the increase, telecommunications tariffs were below regional benchmarks and resulted in underinvestment in the sector.

“We will continue to press for tariff revisions that maintain the value of our service offering,” the company said.

The country’s telecommunication providers have in recent months been hiking data charges regularly saying that was caused by surging operational costs and the need to increase foreign currency to import spare parts.

Despite these hurdles, Econet raised voice and data volumes by 32% and 46% respectively in the nine-month period to the end of November 2022. This translated to a 9% surge in revenue for the period.

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