The tariff increases on voice calls, SMS and data by the telecommunications regulator, Postal and Regulatory authority of Zimbabwe (Potraz) last week remains way below sustainable levels for mobile network operators (MNOs), industry experts have warned.
Potraz increased the tariffs on data, SMS and voice calls by 56.64 percent much to the chagrin of economically hard-hit consumers.
Voice calls, SMS and data prices went up from $ 0.75, $ 0.19 and $ 0.15 to $ 1.17, $ 0.30, and $ 0.23, respectively.
However, analysts note that the tariff is rather insignificant in contrast to the high operational costs mobile network operators encounter.
“Definitely, it’s insignificant, not with inflation at 540 percent. Their (MNOs) revenue has also been eroded with OTPs like Whatsapp which one can use for voice call, SMS and media,” chairman for Zimbabwe Information and Communication Technologies (ZICT), Jacob Mutisi told 263Chat Business.
“There are no tariff structures, we are in a hyperinflation environment and salaries are stagnant. Consumers will feel hard done and MNOs will tell you it’s not sufficient because there is also need to pay their foreign obligations yet they get their revenue in ZWL,” he added.
Zimbabwe has seen year on year inflation hover above 500 percent, a development toxic for business.
This has seen consumer spending on telecoms products weaken severely and operators have had to come up with innovative promotional bundles that are cheaper just to sustain operations.
Overheads have shot up in costs for operators as they have to put up with sourcing for alternative energy sources at their base stations due to constant power cuts.
“The major cost is the equipment to keep the system going. In the current environment they need their base stations to be working which needs power 24/7 so they are now depending on fuel and installing solar to keep them going,” Mutisi said while he also urged telecommunications companies to be innovative and also open new revenue lines outside data and voice.
“There is now a need for MNOs to look for other sources of revenue that to depend on data and voice,” he said.
Worryingly, MNOs needs foreign currency to import data yet the depleted RTGS earnings makes their predicament much more complicated.
Recently, internet service provider, Liquid Telecoms announced that the low tariffs and the constant devaluing of the currency were complicating its efforts to pay external loans acquired in foreign currency that was spent on its broadband capital projects.
“We actually have the lowest tariff in the region. The Zimbabwe dollar will buy you nothing. We are actually suffering as we are lagging behind horribly. The industry is in dire stress as I speak,” Liquid Telecom regional chief executive, Wellington Makamure said.