Zimbabwe News and Internet Radio

Potraz slashes mobile data charges

By Freeman Razemba

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has reduced local mobile data and Internet charges after concluding a cost modelling exercise for telecommunication network services in the country covering mobile, fixed and Internet access networks.

ICT minister Supa Mandiwanzira
Information Communication Technology, Postal and Courier Services Minister Supa Mandiwanzira

POTRAZ said the costing exercise was done by a German company, Detecon International.
The new tariffs show out-of-mobile data charges have been reduced to 5 cents per megabyte from 12,5 cents, while the national interconnection rate goes down from 4 cents per minute to 2 cents with effect from July 1.

Addressing a Press conference in Harare yesterday, Information Communication Technology and Cyber Security Minister Supa Mandiwanzira said the costing exercise by Detecon was based on the long-run-incremental costing (LRIC) models set in 2014 by the same company.

“The authority re-engaged Detecon in 2017 to update the LRIC cost models to account for emerging market trends in terms of changing consumer behaviour which is moving from being voice-centric to being data-centric as well as technological evolution, in particular the impact of over-the-top services on voice traffic as well as the roll out of the new technologies like long term evolution (LTE),” he said.

He said pursuant to extensive consultations with telecommunication operators and other stakeholders in 2017, the authority had formulated an implementation roadmap for the LRIC models results.

“In doing so, the authority took into account the prevailing economic environment as well as the competing needs to ensure operator viability and service affordability for the consumers.

“These need to be balanced to ensure the delivery of high quality innovative services and applications which are critical in enhancing consumer welfare, business continuity and the country’s overall business competitiveness,” Minister Mandiwanzira said.

He said out-of-bundle mobile data charges threshold would be reduced from the current average rate of 12.5 cents per megabyte to 5 cents per megabyte exclusive of all taxes. “This applies to internet/data that is used outside the WhatsApp, Facebook and Twitter bundles, among others,” he said.

Minister Mandiwanzira said USSD (unstructured supplementary service data) charges threshold would be reduced from the current 12.5 cents per session to 5 cents.

“This is meant to address the high transaction cost of e-payments and increase financial inclusion. To ensure that this reduction benefits the transacting public, the authority has engaged the Reserve Bank of Zimbabwe who will engage financial service providers so that the reduction is passed on to the transacting public,” he said.

He said the national interconnection rate would be reduced from the current 4 cents per minute to 2 cents exclusive of all taxes and that this applies across all interconnection operators.

“The threshold for mobile voice and SMS shall be reviewed in due course. Fixed voice charges shall be left to market forces subject to regulatory approval. Internet/data charges for Internet Access Providers (IAPs) services shall be left to market forces subject to regulatory approval.

“POTRAZ shall review the thresholds for charges for telecommunication services on an annual basis in line with market developments,” Minister Mandiwanzira said.

In June last year, POTRAZ started evaluating local data charges and major cost drivers amid indications the cost of data was too high.

POTRAZ director general Dr Gift Machengete said in an interview that the ongoing assessment was part of regular exercises by the regulator to ascertain the state of the industry.

A research done by Research ICT Africa in 2016 and submitted to the Parliament of South Africa, established that Zimbabwe had the third most expensive mobile data in Africa with the cheapest monthly 1GB data package at $30.

Reports indicated that the two most expensive monthly bundles in Africa were South Sudan at $90,83 and Swaziland $30,33.

The cheapest 1GB of data was available in Tanzania $0,89, Egypt $2,82 and Mozambique $2,87.
The price for Zimbabwe was for standard packages and excluded bundled service telecoms operators offered to entice their consumers.

Data has become a key source of revenue for telecom companies in the face of falling revenue from traditional major contributors such as voice and SMS, which have suffered from growth in alternative options provided by over-the-top services.

Zimbabwe’s biggest mobile phone operator Econet Wireless, with over 10 million subscribers, said data and mobile money now made up 32 percent of revenue. The Herald