An increase in tariffs by telecom service providers has angered consumers despite the regulator’s approval, with ordinary people and business leaders saying the upward review has pushed access to digital services out of reach for many while increasing the overall cost of business.
The Zimbabwe Postal and Telecommunications Regulatory Authority (Potraz) announced new tariffs for voice, data and SMS in local currency last week, as companies finally switched to the new Zimbabwe Gold (ZiG) currency.
The regulator set voice tariffs for mobile network operators at ZiG 0.0098 per second, with data now selling at ZiG 0.0928 per megabyte while an SMS now costs ZiG 0.1207.
Econet Wireless Zimbabwe’s cheapest eight-gig private Wi-Fi package costs ZiG 220, which if converted to forex using yesterday’s exchange rate would cost about US$16. On the other hand, if an individual buys directly using foreign currencies, the same package costs US$13. The larger 50GB package costs ZiG 1133, which equates to about $84 USD.
A monthly NetOne package of 1.5GB costs ZiG138. Bulk data service provider Liquid Intelligent’s unlimited package costs ZiG 5900, which equates to about $437 USD.
Speaking at a recent stakeholder engagement meeting, Botraz Managing Director, Dr Gift Machingate, said that although the need to increase tariffs may seem counter-productive in a world where affordability is paramount, it is necessary to strike a balance. Careful between ensuring access to basic ICT services and ensuring access to basic ICT services. – Ensuring the long-term sustainability of the sector.
As the country increasingly embraces the Fourth Industrial Revolution and the Internet of Things, business leaders insist there is a need to address the affordability of data and other digital services.
Zimbabwe National Chamber of Commerce (ZNCC) Vice President, Matabeleland Branch, Mr Mackenzie Dongo, said service providers must strike a balance between increasing data tariffs and ensuring smooth business operations.
“These days, most business is done online, so the more data costs, the more expensive it is to run a business. In Zimbabwe, we look seriously at the cost of doing business, which we feel is higher and is usually actually passed on to the end users.”
“So, affordable data means affordable end products. If it’s expensive, the end product will be expensive,” Mr. Dungo said.
He said service providers should strive to make Internet services more reliable and cost-effective for consumers. Mr Dongo said there was a need to reconsider the cost of data and make it more affordable not only for businesses but for the general public as well.
Bulawayo businessman and economic analyst, Mr Maurice Mbala, said given that most business was done virtually, the recent increase in data prices was expected to have an impact on other businesses.
“It is an increase in the cost of doing business, which may lead to price increases for some goods/services provided, especially those with a significant online presence,” he said.
After that, it will stabilize after the business adapts to the new changes. “This may reduce operational efficiency and effectiveness of conducting transactions,” Mr Mbala said.
National Consumer Rights Association spokesperson, Mr Efe Ncube, said consumers had noted with concern the rise in data prices. He said rising data prices could contribute to an inflationary environment while also becoming a barrier to universal access to education.
“You will appreciate that education is now taking place online, and any increase in data prices is likely to have a negative impact on access to education, with the most vulnerable members of society being the most affected,” he said.
“Access to quality education will eventually become a privilege for affluent families,” Mr Ncube said.
He said disparities in data prices, especially the rising cost in local currency, were the first steps in undermining the newly introduced ZiG, and there was a need for the government to rein in the companies.
“We are seeing stores offering their own exchange rate, which is not the official exchange rate. This undermines the confidence in the local currency, which we are supposed to be building by now,” Ncube said.
“The Zimbabwean dollar has suffered due to such actions which have led to higher prices, market volatility and uncertainty. There is a need to address this now before ZiG notes begin trading at the end of the month.
Members of the public said that the rise in data prices was unjustified, considering that mobile telecommunications service providers had failed to provide reliable service.
Bulawayo resident, Mr Simiso Moyo, said what was worrying was that as data tariffs continued to increase, consumers sometimes purchased data that expired without being used.
“Imagine, if you buy this hourly data package, sometimes the data expires before you can do anything because the network will be so low,” he said.
“In some homes, I have heard individuals complaining that data can only be accessed from one place. I think providers have to do better because we are subject to change,” Mr Moyo said.
Gweru’s Mr Noah Arkman said internet access and affordability remained an issue for consumers.
“It is rather unfortunate that these network companies increase data prices when they want to, when they fail miserably to provide quality service. Most of the time we are affected by reduced connectivity,” he said.
Alfonso Nduku said that high tariffs create inequality between users of different income groups.
A student at the National University of Science and Technology (NUST), Mr Donald Mkwananzi, said the rise in data prices was putting pressure on their studies.
“I don’t even know how my parents will be able to afford data in the future because affording tuition fees is a struggle in the beginning. I can’t even afford to stay in boarding houses that have Wi-Fi, so that means I have to stay longer in the campus,” he said. University so that I can benefit from the Wi-Fi service there and reduce the burden on my father.”
ICT expert, Mr Robert Ndlovu, said the telecommunications sector faces an operational dilemma as it is expected to provide affordable internet services versus maintaining expensive infrastructure that requires foreign exchange.
“Telecom companies in Zimbabwe depend on foreign currencies to purchase bandwidth and basic network infrastructure. This dependence means the depreciation of the local currency.” [before introducing
(ZiG)] It puts enormous pressure on operational costs.
“The deteriorating energy situation is increasing reliance on diesel generators, which are powered by US dollars, resulting in higher costs for operators.
“In addition, the prices of spare parts, equipment, hardware and software licenses are usually in foreign currency, which further inflates operational expenses,” Ndlovu said.
He said sharing communications infrastructure could reduce the cost of production.
“The current pricing model poses significant challenges to promoting the use of technology. A multi-faceted approach is essential. This includes exploring infrastructure sharing, regulatory interventions to address operational costs and strategies to align pricing with consumer affordability,” Mr Ndlovu said. Event Recording
