The Sunday Mail
Africa Moyo
The Postal and Telecommunications Regulatory Authority of Zimbabwe will not consider upwardly reviewing mobile charges to prop-up operators who blame a 35 percent tariff cut in early 2015 for declining revenues.
In January, mobile tariffs were slashed from USc23 per minute to USc15.
Statistics from Potraz indicate revenue for mobile operators tumbled 14 percent to US$188 million in the first quarter of the year, while voice revenues for fixed telephone operators fell 19 percent to US$35,7 million.
Last week, the country’s biggest mobile telecommunications business by revenue and subscribers, Econet Wireless Zimbabwe, reported that revenues to August 31, 2015 slumped 17,7 percent to US$323 million from the same period a year ago.
On October 7, 2010, EWZ said it had retrenched 100 workers as a direct result of the 35 percent tariff cut.
However, Potraz acting director-general Mr Baxton Sirewu told The Sunday Mail Business that revenues were falling not only because of the tariff reduction, but also because of the influence of over-the-top services (OTTs) such as WhatsApp.
“Potraz is not contemplating an upward review of tariffs as the current tariffs are cost-based and were established following a rigorous scientific process.
“We will, however, review the planned implementation of the second phase of the Long Run Incremental Costing (LRIC) results glide path scheduled for January 2016, in cognisance of the economic downturn and other factors such as energy costs due to electricity black-outs, the introduction of excise duty on airtime, impact of OTTs on traffic among others,” said Mr Sirewu.
Mr Sirewu said the downward tariff review made mobile phone services accessible to more subscribers.
Potraz dumped the Costing International Telecommunication Union pricing framework – an International Telecommunications Union’s model for determination of costs and tariffs, including interconnection and accounting rates, for telephone services – in favour of LRIC.
“However, we believe that the current downturn of the economy has suppressed demand for services coupled with the substitution effect of OTTs, which is also eating into the demand for voice and SMS traffic,” said Mr Sirewu.
In its results for the half-year to June 2015, NetOne, the second largest mobile operator in the country by subscribers, blamed introduction of a five percent excise duty in the fourth quarter of 2014, customs duty on mobile devices, and the January 2015 tariff reduction, for declining revenues.
Operators are being urged to be innovative and create new revenue streams through sustainable partnerships such as infrastructure sharing. It is argued that operators could generate more revenue if they harnessed the five transformative enablers; namely cloud, Internet of Things (IOT), big data, broadband and data centre.
Cloud, often referred to as cloud computing, is the delivery of on-demand computing resources – from applications to data centres – over the Internet on a pay-for-use basis.
IOT is the concept of connecting any device with an on and off switch to the Internet, including cellphones, coffee makers, washing machines, headphones, lamps and wearable devices.
