Floor prices divide mobile operators

The setting of floor prices has divided Zimbabwe's mobile network operators with some saying it would negatively affect their products while others are saying they need it to recoup the huge operational costs they are having to fund.

The floor prices, which caused public outcry at the beginning of the year were set at 12c per minute for traditional voice and two cents per megabyte for data.

The Postal and Telecommunications Regulatory Authority of Zimbabwe, which later reversed the tariffs following the intervention of Information Communication and Technology Minister Supa Mandiwanzira, had set the floor price under the Regulatory Determination on Floor Prices for data and Bundled Service packages including promotions to come into effect on January 9.

But in presentations before the Parliamentary Portfolio Committee on ICT yesterday, the MNOs had different positions on the floor prices with NetOne and Telecel Zimbabwe saying the floor prices would affect them negatively.

Econet in their presentation said Potraz gave a directive for the setting of floor prices as a pre-condition for a promotions framework. It said the huge capital outlay meant that they needed to recoup their costs.

NetOne chief executive Brian Mutandiro said despite attending a meeting of MNOs on the matter, his network had not implemented the floor prices but had instead petitioned Potraz for a review.

Instead, NetOne was "grateful" to the ICT ministry for reversing the floor prices. He said the floor prices had the effect of wiping out NetOne's promotion, OneFusion.

Mr Mutandiro said they had "gone along with the meeting" but had reserved their position.

"As a network we are very relieved that the floor prices were reversed by the ministry. It was going to affect us very adversely. As you are aware we have got a very popular package, OneFusion, which is growing in leaps and bounds and that has assisted us to acquire subscribers much faster than our competition. So we were the ones that were going to lose the most if this had been followed through," said Mr Mutandiro.

Telecel chief executive Angeline Vere said Econet made the presentations on floor prices as it was the secretary of the MNOs committee. Mrs Vere also said the floor prices should also be adopted by Internet Services Providers.

"Econet presented its proposal to members arguing that a floor price of 12c for voice and five cents for data be adopted. NetOne, when we started the meeting, proposed four cents but when we discussed further they then adopted the five cents that Econet had proposed and had initially said 10c for data but eventually moved to 12c for voice. Telecel, we proposed for voice 11c and for data half a cent. Members noted that the voice proposals where close and we discussed that at length but we then agreed that since two operators were proposing 12c we could agree on the 12c for voice. The difference in data was too huge with NetOne and Econet proposing five cents and Telecel half a cent. We then agreed that we go back and re-look at our positions.

"We had re-looked and agreed to move to one cent but NetOne and Econet remained at five cents. TelOne then came in and proposed two cents as a floor price," said Mrs Vere.

Following that Mrs Vere wrote to Potraz on the agreed position for voice at 12c and the varying proposals for data floor price and that each operator would present their own position to the regulator.

She said Telecel submitted its own proposal suggesting that the floor price be kept at the barest minimum. Telecel went on to implement the floor price at the end of December, and had to reverse the floor prices following their reversal.

Econet chief executive Douglas Mboweni, however, said the floor prices were a pre-condition for a promotions framework to be released by Potraz.

"On August 14, 2016, again we got a letter from the then (Potraz) acting director general Cecilia Nyamutswa who wrote to us to the effect that the promotions guideline was now in place. We were all excited when we heard that but we were then told that we need to submit what is called a floor price as a precondition to the framework being released," said Mboweni.

"This is why all operators subsequently met under the Telecommunications Association of Zimbabwe and as Econet we participated and made our submissions for consideration. Now it must be considered that this was to fulfil the request coming from the then acting director general's letter which was saying you as operators come up with a floor price. And we did just that," he added.

ICT Minister Mandiwanzira and Potraz requested for more time and are expected to appear next week.