NetOne Building

NetOne Announces Tariff Hikes

Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has approved request which were made by Mobile Network Operators (MNOs) to increase tariffs next month although they have been blocked from using the current trading rate.

In a public notice they released, NetOne announced that it will be charging RTGS$0.2199 per minute on local networks from 0.16 and RTGS$ 1.0731 per minute international calls.

Netone is one of the Mobile operators that has already given a notification of tariffs increase as at 1 April 2019 , few days after Econet Wireless has done the same.

Data Charges are now pegged on 0.0646 per megabyte and prices of other commodities like sim cards they cost RTGS$1 for both new sim card and replacements.

This move of tariff adjustment taken by MNOs can help the telecommunications to increase revenue but at the same time in the long run they might encounter loses.

in a letter giving green-light to operators Potraz wrote:

BACKGROUND 1.1 The current tariffs for telecommunication services are pegged in United States dollars. The need to review tariffs in 2019 comes against a backdrop of rising cost of service provision owing to the worsening shortage of foreign currency. This has resulted in imbalances in the pricing of goods and services across the economy.


1.2 Tariff thresholds for mobile voice services were reviewed downwards in 2015 from USD0.23 to USD015 per minute. In 2016, the thresholds were reviewed upwards from USD0.15 to USD0.16 per minute to factor in the increase in the Universal Service Fund levy that had been increased from as% to 1.5%. Thresholds for out of bundle mobile data, USSO and national interconnection rate, were reviewed downwards in July 2018, from USD0.15 to USD 0.05 per megabyte; USD0.125 to USD0.05 per session; and USD0.04 to 3000.02 per min. respectively. Tariffs for fixed voice and Intemet Access services were left to market forces subject to regulatory approval because their cost of provision was much higher than what they were charging.


1.3 The above scenario, means that tariffs for telecommunication services have not been aligned to the movement in cost of service provision in 2018 as well as the new exchange rate regime that was pronounced by the new Monetary Policy.

1.4 Notwithstanding the above, the tariff thresholds set in 2018 were well above the 2017 LRIC update results. This has had a cushioning effect on operators against the current inflationary pressures, except for services that have experienced a decline in traffic after 2016, which is the reference year on the basis of which the 2017 LRIC cost models were updated. Inversely, for services that have registered significant traffic growth, there is need to assess the impact of such growth in terms of diminishing marginal cost of service provision against the need for continuous network capacity upgrades. Also, the need to balance

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