Zimbabwean mobile network operators, Potraz on collision course over pricing

Zimbabwean mobile network operators (MNOs) are up in arms with the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) over the ICT industry regulator's alleged intransigence over the operators' pricing adjustment application.

Since the new Monetary Policy Statement (MPS) was announced on February 20, 2019, operators have been pushing Potraz to review the call charges upwards.

The monetary statement effectively adopted the surrogate bond note currency into official currency and at the same time announced the devaluation of the local currency from a fixed USD 1:1 RTGS dollar to a floated interbank rate of USD 1:2.5 RTGS dollar.

Matters came to a head last Friday, when - in a circular to operators - the regulator proposed to leave the tariff unchanged.
Tariffs for mobile operators in Zimbabwe are regulated by the government through Potraz.

"The problem is that the approved current tariff is in US dollars, but the regulator has so far not allowed the operators to charge customers in USDs or the RTGS equivalent," said a source, who said the circular acknowledged this.
"How the regulator expects the industry players, whose USD debt and high forex capex costs are well documented defies logic.

"The expectation was that short of authorising the operators to charge in USD, Potraz would propose an RTGS tariff that takes into account the new exchange rate. The operators would then be allowed to determine the effective tariff or charge, within a certain range based on factors such as the elasticity of demand and so forth," the source said.

The input costs of several industries went up since government raised the price of fuel three-fold in January this year and following the formal devaluation of the local currency by nearly two thirds (or 66 percent).

Similarly, many industries that import inputs for their end-products or services have adjusted their price structures in line with the change in exchange rate, so that they stay in business.

Efforts to get an official comment from the mobile operators or from Potraz were unsuccessful as both parties said they did not want to preempt on-going consultations.