Econet in upward review of data tariffs

Source: Econet in upward review of data tariffs | The Herald July 16, 2019

Econet in upward review of data tariffsDr Machengete

Business Reporter

Econet Wireless Zimbabwe has reviewed its data bundle and SMS pricing by between 30 and 50 percent, a move seen by analysts as a way to align tariffs with the prevailing economic environment.

The new data tariffs, which came into effect at midnight last night, come as the value of the local currency has significantly weakened, by more than 600 percent since the last tariff increase in April this year.

At the time of the last increase, Postal and Telecommunication Regulatory Authority of Zimbabwe (Potraz) director general Dr Gift Machengete said the increase in mobile data bundles “was as a result of the expiry of a promotion that was being run by mobile operators.”

“Mobile operators have been running promotions that saw a decrease in the data bundles and they have since removed it, leaving their clients believing that they have increased the data bundles,” he said then.

Appearing before the ICT Parliamentary Portfolio Committee Dr Machengete said that there was an “overall growth in annual operating costs by the fixed and mobile networks”.

He said the apportionment of costs per product is based on use of network elements and traffic using the Long Run Incremental Cost (LRIC) model, and Potraz cannot penalise a service provider because of making its profit.

“Operators have strived to invest in their networks, despite challenges of accessing foreign currency as well as (the scarcity of) cheap international financing,” he said.

“There was an overall decline in annual sector investments in 2018,” said Dr Machengete at the time.

Declining investment in the sector seems to have continued in the first quarter of this year, with mobile operators recording an overall 22,1 percent decline in capital expenditure in the quarter to $22 978 234 from $29 501 279.

Given this background, as well as the weakening local currency, analysts say a tariff hike was inevitable. With the new tariff, a Whatsapp plus Pinterest bundle will now cost $12 per month, up from $8 previously. A 3.1GB data bundle will now cost $150 from $100 before the latest adjustment, according to a schedule seen by The Herald Business.