Potraz Defends High Tariffs
11 January 2017
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THE Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has defended its decision to increase data and voice call service charges despite fierce criticism from consumers.

The regulator has set new minimum floor prices at 12 cents on all voice calls and two cents on data services provided by the country’s mobile network providers — NetOne, Econet and Telecel.

The move has sparked outrage with consumers taking to social media to condemn the tariff increase, which they view as “unjustifiable” at a time when the economic conditions are hard on ordinary people.

Responding to emailed questions yesterday, Potraz director-general Dr Gift Machengete admitted that the telecoms regulator had not consulted subscribers in coming up with the new floor price regulation.

He, however, said all key decisions made by the authority were informed by the consultation of appropriate stakeholders and that the scope of consultation depended on the issue at hand.

“In the case of the floor prices, consultations were carried out with operators and did not involve subscribers,” said Dr Machengete.

“This was on account of the fact that the scope of the consultations mainly focused on the cost of service provision, which in our view did not warrant the involvement of subscribers.”
He said the mobile operators “had actually proposed floor prices ranging between $0,01 and $0,05 per megabyte. The floor price of $0,02 per megabyte was extrapolated using the 2014 Bottom-Up cost model results by factoring in the significant growth in data usage since 2013”.

Asked why the regulator would impose a tariff increase in a country that is already deemed costly in term of data charges, Dr Machengete said Zimbabwe being a landlocked country has no cable landing stations hence the high costs.
This, he said, meant that the country would have to access submarine cables through third party countries, which makes access to international bandwidth much more expensive.

“There are unavoidable differences in cost between landlocked and coastal countries. A difference should, therefore, be expected between coastal countries such as Tanzania, Kenya, Mozambique, Namibia, Mauritius and South Africa, and landlocked countries such as Zimbabwe, Zambia and Malawi,” said Dr Machengete.

“The wholesale pricing of international internet bandwidth is largely volumes driven. The higher the bandwidth capacity purchased, the lower the price as more volumes attract higher discounts. This is the reason why countries that have bigger populations like Tanzania, South Africa, Mozambique and Uganda have much lower prices for data compared to countries with lower populations such as Botswana, Swaziland and Zimbabwe.”

He said in Zimbabwe the cost of data was worsened by duplication of infrastructure and the dearth of the critical mass of data usage volumes to reduce the average cost of international internet connectivity.

“This is in view of the scale sensitive nature of the business model used by international bandwidth supplier,” said Dr Machengete.

He said Potraz was reviewing the cost models that were built in 2014 with a view to establishing the accurate cost of providing data services in Zimbabwe.

On the 5c per $1 health levy which Government proposed in the 2017 national budget starting this month, Potraz said it would consider the views of all stakeholders in coming up with the modalities of its implementation.

Potraz said everything was set for the implementation of the set floor prices and all operators have been informed of the decision. – State Media

0 Replies to “Potraz Defends High Tariffs”

  1. zimbabweans, we should stop being naive and desist form cheap politicking at any given opportunity, lets leave politics out of this POTRAZ mess. this is either a pure blunder by an overzealous person or persons that has nothing to do with elections or politics or a clasic case of corruption by some people in POTRAZ. i know for a fact that operators were consulted of this floor tariff issue way before the CIO man came into the picture and they all went for it, some suggesting as high as 0.05cents per megabyte and now we see Econet charging such ridiculous tarifs, its not because POTRAz says so but they also want to make money because the fact is these telecoms companies were now operating at a loss. someone at POTRAZ was paid by these companies to set the floor price. ladies and gentlemen, my CONSPIRACY THEORY is that this is a case of corruption and not politics. Econet was quick to hike the tarifs and now they can make money. infact, senior management at POTRAZ tried to block the appointment of the CIO man because they thought this plot and other corrupt deals would be unearthed. lets not make our obsessipn with politics overcloud our better judgement. we are all being taken for a ride while the real culprits glot at our naivety and gullibility. the anti corruption commision should look closely at my theory

  2. Preparing to stiffle any kind of internet communication prior to 2018 elections. Remember the minister responsible?

  3. exactly. 5% tax for health fund. people didnt see it coming. are we too illiterate to understand the budget presentation. people should have cried as soon as the presentation was made

  4. Well, the bottom line is, they want to milk the so called 5c per $1 Health fund

    The more expensive the bundle viz-a-vis usage the more they can collect within the shortest time. If they had maintained he status qou, it was going to be a hard target to collect US$100k. But with this pricing model and given that they know their populacy well. They can rake in US$1million in a weeks time.

    Behind the “Health finger” there is someone hiding and his name is 2018 elections campaigns. beware of abuse of this health fund and brace for violense, short-sleeve and long sleeve. the mentally challenged Jim kunaka was recruitted back to the murderous party.