ZIMBABWE’S telecoms regulator, Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), has approved a 95% upward adjustment in mobile tariffs across board, saying the previous tariffs were no longer sustainable.
The increase comes after the regulator approved another 182% increase as recent as August 2019.
Justifying the increase, Potraz said the current tariff threshold that was set in August 2019 had been rendered “unsustainable as the operating environment has further deteriorated due to inflationary pressures”.
“Accordingly, the Authority has found it necessary to review tariff thresholds for telecommunication services by up to 95.39% based on the Telecommunication Price Index (TPI) that was computed in consultation with all operators.
“In view of the foregoing, and guided by the Act, all public switched and mobile operators may adjust their tariffs in line with the above thresholds for approval by the Authority,” reads Protraz’s statement.
The latest adjustment will see on-net calls per minute cost 96 cents (Zimbabwean dollars) up from 48 cents. The new tariffs however do not include some levies and taxes, which the regulator left to the operators to factor into the tariff adjustments.
The new tariff increase comes at a time the price of electricity and fuel have also significantly gone up. Power and fuel are major costs in the provision of telecoms services.
These costs significantly went up when the national power utility ZESA began an aggressive load shedding programme early this year to mitigate the national power deficit. To avoid network blackouts, operators have resorted to using expensive diesel generators daily, to keep their base stations up and maintain telecom service for their customers.
While the tariff increase will put more pressure on consumers, it will come as a great relief to the telecoms operators, whose viability has increasingly become precarious in the face of mounting costs and a weakening local currency.
The interbank rate is currently trading at an average of around 1USD:Z$15. For the ICT and telecoms sectors, about 80% of whose costs are in US dollars, the tariff increase will be seen as a most welcome relief, but probably not going far enough.
