Potraz pegs floor prices for mobile operators


Christopher Farai Charamba, Harare Bureau
Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has set floor prices for voice and data for bundled services including promotional packages.

A floor price is a minimum effective tariff chargeable per minute of voice calls and per megabyte of data.

According to communications by Potraz to mobile operators, the floor price for traditional voice services shall be set at 12c per minute while the floor price for data shall be set at 2c per megabyte.

The Regulatory Determination on Floor Prices for Voice and Data for Bundled Service Packages Including Promotions will come into effect on January 9, 2017.

“All relevant licensees offering promotions and bundled service packages must review their offerings in the market in line with the floor prices set and discontinue all current offerings that are not in line with the floor prices by 9th of January 2017,” said Potraz.

According to Potraz, “the floor prices shall go a long way in addressing the apparent under-pricing of voice and data services that was characteristic of data bundles and promotions that were being offered by operators.”

In July last year, Potraz suspended all promotions citing the fact that data bundles and packages offered by telecommunications companies resulted in situations where data services were priced well below 1c per megabyte.

This they said, increased data traffic significantly without a corresponding growth in revenue realised by the operators.

“Overall revenues realised from the telecommunications sector” Potraz said, “continuously declined at the rate of 10-12 percent per quarter since the beginning of 2016.”

The new mandatory tariffs are likely to affect NetOne OneFusion customers the most, whose data tariffs are currently priced below 2c per megabyte for all the various OneFusion plans.

Econet and Telecel subscribers are set to benefit from the new floor prices as their monthly data bundles are priced between 2-3c per megabyte depending on the option selected.

In addition to the floor price for voice and data services, Potraz has invited mobile operators to submit proposals on a premium tariff to be charged on data used for OTT voice calls. This would see customers charged a levy for WhatApp calls, Viber calls and similar services.

According to the regulator: “The advent of OTT services has seen mobile operators experiencing revenue reductions as a result of the substitution of voice and SMS by Internet Protocol (IP) voice and messaging services of the international OTT players who ride on the networks of local operators
“The growth of data revenue has not been sufficient to compensate for the sharp decline in voice and SMS revenues.”

In September last year, Potraz held a consultative workshop on OTT services. Guided by the recommendations from the consultation process, the authority is considering allowing operators to charge a premium rate on data used for OTT Voice calls.

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