Potraz defends data, voice call service charges increase

11 Jan, 2017 - 00:01 0 Views
Potraz defends data, voice call service charges increase

The Chronicle


Bianca Mlilo, Business Reporter
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.

One gigabyte of data in Zimbabwe costs $35 compared to South Africa’s $5,30 and Tanzania’s $0,90.

“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.


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