#MondayBlues: How Does Potraz' Floor Price Directive Address Under Pricing?

TELECOMS regulator, the  Postal and Regulatory Authority of Zimbabwe (POTRAZ) set floor prices for voice and data for bundled services including promotions which comes into effect today leaves a lot to desire considering how it fails to create the ‘level playing field’ for customers and mobile operators.

Just when we thought the directive to enforce a floor price onto the mobile operators was commendable to fix the unreasonable tariffs, it seems Potraz is heavily regulating the telecoms sector by instructing operators how much low they should charge,  a move only natural discourse should take.

By Kudakwashe Pembere

Now, it boggles the mind how this price reduction of voice and data services addresses the under pricing by mobile phone operators.

“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,” said Potraz in a statement

With the prices being seen as not entirely satisfactory by the public and more of protecting the interests of the mobile operators, this now becomes ‘apparent’ how protective Potraz is of mobile operators rather than the customers.

The public has openly noted that Zim telecoms sector has become too regulated to the extent that they feel the regulator is now more of a player playing the big brother role who needs scores going in a certain direction.

In a move which many speculate that the government is using Potraz to increase taxing revenue or controlling how much time people spend online,  Potraz which last year fought fierce battles  on price war cuts has taken a new twist to keep them up.

Rubbing salt to the wound, Potraz in addition to the floor price for voice and data services is inviting mobile operators to submit proposals on a premium tariff to be charged on data used for OTT voice calls. Of course the operators are likely to 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.

Customers will be levied for the WhatApp calls, Viber calls and similar services.

“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.”

WhatsApp video streaming

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 in the telecoms history has never transpired.

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 while Econet and Telecel subscribers will benefit from the new floor prices as their monthly data bundles are priced between 2-3c per megabyte depending on the option selected.

The effects of such a move  would be greatly felt by ordinary citizens who were getting as low 1c or mb and will be forced to adjust to new tarrifs.

 

In July last year, Potraz suspended all promotions citing the fact that data bundles and packages offered by telecommunications companies resulted in situations where data services were priced well below 1c per megabyte.

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.”

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.

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