Potraz adopts new tariff model

Source: Potraz adopts new tariff model | The Herald April 4, 2019

Potraz adopts new tariff model

Enacy Mapakame and Tawanda Musarurwa
The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has moved away from a fixed model for determining the various tariffs for telecommunications operators to a flexible model.

The new model is meant to improve sustainability of the local telecoms firms’ businesses by taking into account their need for viability and customers’ need for affordable services.

The tariff model has resulted in tariff adjustments by mobile telecoms operators in line with a general 23 percent increase in the cost of service provision across the telecoms sector.

According to the sector regulator, the new tariff model takes into account the “cost of providing services, market trends, economic fundamentals and affordability”.

This 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,” said Potraz.

The new tariffs as a result of the change in pricing model came into effect on April 1, 2019.

Zimbabwe’s three mobile telecoms companies have since announced their new prices for voice tariffs, which are almost at the same level.

Econet Wireless is now charging RTGS$0,2157 per minute, while Telecel is now charging $0,22 per minute and NetOne’s new rates now stand at $0,2199 per minute.

Potraz says it factored in changes in exchange rate, after the Reserve Bank of Zimbabwe established an inter-bank foreign currency market rate.

The tariff model includes calculation of exchanging the US dollar pegged tariff to RTGS$ at a rate of US$1 to RTGS$2,5 in order to cushion operators against exchange losses.

Tariff thresholds for mobile voice services were reviewed downwards in 2015 to US15 cents a minute from US23 cents.

The thresholds were however reviewed upwards to US16 cents per minute to factor in the increase in the Universal Service Fund Levy that had been increased to 1,5 percent from 0,5 percent.

Sources say telecoms firms had requested over 40 percent increase in tariffs which Potraz turned down.