Potraz won't tolerate predatory pricing

THE Postal and Telecommunications Authority of Zimbabwe says it will not tolerate mobile network company promotions that exhibit tendencies of predatory pricing.

"Predatory pricing", the telecommunications regulator said, refers to the act of setting prices low in an attempt to eliminate competition.

This comes after the industry regulator came up with stringent guidelines for the running of promotions by telecoms operators this year. According to Potraz, the new guidelines took effect from March 21, 2017. Potraz said the guidelines, among others, are meant to promote ethical conduct, standards, minimum requirements and protect consumers.

Further, the framework will outlaw practices that prevent, reduce, limit or distort competition that may be hidden in any promotional packages. This will also minimise information asymmetries of prices, which impact consumption choices, between service providers and consumers. The guidelines require operators to submit an application to the authority at least 30 days before the proposed or planned launch of a promotion.

Potraz said each promotion shall not exceed a period of three months; and that no licensee shall conduct the promotion for the same product or service more than twice within twelve calendar months.

If an operator discontinues a promotion and if the terms and conditions associated with it are no longer offered, it shall notify the regulatory authority at least 14 days before doing so.

Operators shall notify consumers of the intended discontinuation at least fifteen (15) days before discontinuation of the service and such notification should be given significant prominence.

Operators shall submit detailed representations on the concerned goods and services to be promoted, targeted consumers, start date and end date of promotion, customer options opt in and out options and applicable rewards in case of loyalty/non-tariff based promotions.

The regulations will allow promotions that have negative impact on service provision, reduce quality of service standards, compromise on basic consumer rights and obligations including safety, privacy, information and choice; all in the interest of transparency in service delivery or have a negative impact on the viability of the operator's business.

"Where a licensee communicates certain categories and or specific products services as rewards or potential rewards for partaking in a promotion, it must ensure that the specific items and or services portrayed and for promised are not varied," part of the regulations read.

The telecommunication operators are now required to ensure that proposed promotional tariffs are non-discriminatory. Any tariff changes or reviews on promotions shall take effect after approval by Potraz.