The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) is heavily regulating the telecoms sector, few months after halting mobile promotions, by instructing operators how much low they should charge, a move only natural discourse should have taken.
The regulator introduced floor prices for voice and data for bundled services including promotions which comes into effect today, (9th January 2016). A floor price is a minimum effective tariff chargeable per minute of voice calls and per megabyte of data.
According to communications by Potraz to mobile operators, the floor price for traditional voice services shall be set at 12c per minute while the floor price for data shall be set at 2c per megabyte.
While naturally, there should not be any regulation towards any promotion, Potraz has instructed players what to charge on their own in house promotions, a move which has never transpiredin the telecoms history.
Potraz would have been expected to regulate the actual tariffs of services not the promotions. Promotional tariffs are supposed to be a jurisdiction of In house creativity, left only for the most creative players to sell and bundle up their products.
The effects of such a move would be greatly felt by ordinary citizens, who are the subscribers whowere now used to getting charged as low 1c per mb, will effectively mean that the only cheapest bundles from Econet of 250mb per $1 will only cost as low as $2.
Telecel Zimbabwe were the first victims this year, after NetOne was forced to discontinue their most popular ever data one fusion promotion.
Of course the operators may celebrate such a move as it will likely improve their revenue streams, while millions of subscribers really felt dumped by the regulators which used to fight on their behalf.
The Regulatory Determination on Floor Prices for Voice and Data for Bundled Service Packages Including Promotions is a directive for all mobile operators to reconsider their tarrifs.
“All relevant licensees offering promotions and bundled service packages must review their offerings in the market in line with the floor prices set and discontinue all current offerings that are not in line with the floor prices by 9th of January 2017,” said Potraz.
According to Potraz, “The floor prices shall go a long way in addressing the apparent under-pricing of voice and data services that was characteristic of data bundles and promotions that were being offered by operators.”
This they said, increased data traffic significantly without a corresponding growth in revenue realised by the operators.“Overall revenues realised from the telecommunications sector” Potraz said, “continuously declined at the rate of 10-12 percent per quarter since the beginning of 2016.”
The new mandatory tariffs are likely to affect NetOne OneFusion customers the most, whose data tariffs are currently priced below 2c per megabyte for all the various OneFusion plans. Econet and Telecel subscribers are set to benefit from the new floor prices as their monthly data bundles are priced between 2-3c per megabyte depending on the option selected.
In addition to the floor price for voice and data services, Potraz has invited mobile operators to submit proposals on a premium tariff to be charged on data used for OTT voice calls.
According to the regulator: “The advent of OTT services has seen mobile operators experiencing revenue reductions as a result of the substitution of voice and SMS by Internet Protocol (IP) voice and messaging services of the international OTT players who ride on the networks of local operators.
“The growth of data revenue has not been sufficient to compensate for the sharp decline in voice and SMS revenues.”
In September last year, Potraz held a consultative workshop on OTT services. Guided by the recommendations from the consultation process, the authority is considering allowing operators to charge a premium rate on data used for OTT Voice calls.
This article with minor tweaks originally appeared in The Herald on January, 5.