THE increase in tariffs by the telecommunications service providers has sparked consumer outcry despite approval by the regulator, with ordinary people and business leaders saying the upward review has pushed access to digital services beyond the reach of many while increasing the general cost of business.
The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) announced the new voice, data and SMS tariffs in local currency last week Friday, as businesses finally switched to the new Zimbabwe Gold (ZiG) currency.
The regulator pegged 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 private Wi-Fi bundle package of eight gig costs ZiG 220, which if converted to forex using yesterday’s exchange rate will cost about US$16. On the other hand if an individual is directly buying using foreign currency, the same package costs US$13. The biggest package of 50 GB costs ZiG 1 133, which is equivalent to about US$84.
NetOne monthly package of 1,5GB costs ZiG138. Bulk data service provider, Liquid Intelligent’s unlimited package costs ZiG 5900, which is equivalent to about US$437.
Speaking at the recent stakeholder engagement meeting, Potraz director general, Dr Gift Machengete has said while the need to increase tariffs may seem counterproductive in a world where affordability is paramount, it was crucial to strike a delicate balance between ensuring access to essential ICT services and safeguarding the long-term viability 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 affordability of data and other digital services.
Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter vice president, Mr Mackenzie Dongo said service providers should strike a balance between data tariff increases and ensuring smooth business operations.
“These days, most business is conducted online,so the more costly data is, the more costly it becomes to run a business. In Zimbabwe, we are seriously looking at the cost of doing business, which we feel is higher and usually, it’s actually passed on to the end users,” he said.
“So, affordable data means affordable end products. If it’s expensive then the end product is going to be expensive,” said Mr Dongo.
He said service providers should strive to make Internet services more reliable and cost effective to consumers. Mr Dongo said there is a need to revisit the cost of data and making it more affordable not just for business but the general public as well.
Bulawayo businessman and economic analyst, Mr Morris Mpala, said considering that most business is being done virtually, the latest increase in data prices is expected to have a downstream effect on other businesses.
“It’s an increase in the cost of doing business, which could lead to price increases in some goods/services being offered, especially those that have a major online presence,” he said.
“Thereafter, it will stabilise after business has adjusted to the new changes. It might reduce operational efficiencies, effectiveness of doing transactions,” said Mr Mpala.
National Consumer Rights Association spokesperson, Mr Effie Ncube, said consumers have noted with concern the rise in data prices. He said high data prices can contribute to an inflationary environment while also becoming a hindrance to universal access to education.
“You will appreciate that education is now conducted online and any increase in data prices is likely to have a negative impact on access to education, with the most vulnerable members of the society being the hardest hit,” he said.
“Access to quality education will end up becoming a privilege for those well to do families,” said Mr Ncube.
He said disparities in prices of data, especially a higher cost in local currency are the first steps in undermining the newly introduced ZiG and there is a need for Government to reign in on the businesses.
“We are seeing shops coming up with their own exchange rate, which is not the official exchange rate. That eats away the confidence in the local currency, which we are supposed to be building now,” said Mr Ncube.
“The Zimbabwean dollar suffered because of such acts of creating price increases, volatility in the market and uncertainty. There is a need to address this now before the ZiG bank notes start circulating at the end of the month.”
Members of the public said the surge in data prices is unjustified, considering that the mobile telecommunications service providers were failing to provide a reliable service.
A Bulawayo resident, Mr Simiso Moyo, said what is worrying is that while data tariffs continue to increase, sometimes consumers buy data that expires without even being used.
“Imagine, if you buy this hourly data package, sometimes the data expires before you can do anything because the network will be just too low,” he said.
“In some houses, I have heard individuals complaining that data can only be accessed from a spot. I think service providers should do better as we are being short-changed,” said Mr Moyo.
Mr Noah Arkman from Gweru said Internet access and affordability remains a problematic issue for consumers.
“It’s rather unfortunate that these network companies are increasing the prices of data as and when they feel like it, when they are dismally failing to provide quality service. Most of the time we are affected by low connectivity,” he said.
Mr Alfonso Nduku weighed in saying higher tariffs create inequalities among users with different income brackets.
A student at the National University of Science and Technology (Nust), Mr Donald Mkhwananzi, said high data prices were a strain to their studies.
“I don’t even know how my parents are going to afford the data going forward because affording tuition fees is a struggle to begin with. I can’t even afford to stay at boarding houses that offer Wi-Fi and that means I have to stay longer on campus so I can make use of the Wi-Fi there and reduce the burden on my parents,” he said.
ICT expert, Mr Robert Ndlovu, said the telecoms sector is facing operational dilemma as it is expected to offer affordable internet services against an expensive infrastructure maintenance that requires foreign currency.
“Telecommunication companies in Zimbabwe depend on foreign currency to procure bandwidth and essential network infrastructure. This dependence means that the devaluation of the local currency [before introducing (ZiG)] puts immense pressure on operational costs,” he argued.
“The worsening power situation increases the reliance on diesel generators, which are fuelled in USD, leading to escalating costs for operators.
“Additionally, the prices of spare parts, equipment, hardware and software licenses are typically in foreign currency, further amplifying operational expenses,” said Mr Ndlovu.
He said sharing of telecommunication infrastructure could reduce the cost of production.
“The current pricing model poses substantial challenges for promoting technology utilisation. A multifaceted approach is essential. This includes exploration of infrastructure sharing, regulatory interventions to address operational costs and strategies to align pricing with consumer affordability,” said Mr Ndlovu.
