Econet hikes tariffs 20%

Econet Wireless Zimbabwe has hiked its voice tariff by 20% to guarantee continued delivery of the service.

The latest tariff adjustment comes at a time when government is banking on increased infrastructure development in the information and communication technologies (ICTs) sector to achieve its vision 2030 targets.

"Without a robust ICT sector, it follows that the dream of an all-inclusive and economically vibrant nation remains a pipe dream," ICT minister Jenfan Muswere said last week, adding that it was critical that the telecommunications sector plays its part in improving Zimbabwe's digital capabilities, especially with regards to ensuring universal access.

"Without access to ICTs, people cannot actively participate in the socio-economic development agenda of the country. Access to ICTs is therefore not a luxury and a preserve for the elite . . . We need to catch up with technology, in particular 5G, for which we need a road map and strategy, or else we remain digital laggards," Muswere said.

Analysts said for this dream to become a reality, the government must approve cost-reflective tariffs and reduce taxes to allow telecommunication firms to continuously re-invest in their businesses and in the industry.

Economic analyst Francis Mukora said current market economic fundamentals were stifling growth in the country's high capital-intensive telecoms industry, which constantly requires a steady flow of investments into networks, spectrum, towers and new technology.

"Contrary to the popular belief that capital injection into the telecommunications industry is a once-off investment, companies have to constantly pour in money to upgrade networks, pay software licences, buy fibre, radio, and towers, among other things.

"And for the industry to survive there is need for sustainable data, voice and SmS tariffs, as well as tax breaks," he said.

Zimbabwe's telecommunications sector dominated by Econet, Netone, Telecel, Telone and Liquid-ZoL is reeling from hyperinflation, declining capital expenditure, rising operating costs and stiff competition from over-the-top services, among other challenges.

Economist Victor Bhoroma said the recent increase in electricity charges also negatively affected the delivery of efficient and quality services to customers in the telecommunications industry.

"The increase in electricity prices, approved by the Zimbabwe energy regulatory Authority for November 2020, by 50%, will undoubtedly have an impact on the prices of goods and services in the market. Prices will increase sharply in Zimbabwean dollars and slightly in United States dollars," he said.

"Households will feel the greatest pinch given the fact that wages have not been adjusted in line with the inflation rate and many are earning below the Poverty datum Line (PdL) which is around ZW$24 000 for a family of six."

National power utility Zesa Holdings has already increased electricity tariffs by more than 150% in the last two months.

Bhoroma, however, said electricity prices have been affected by inflation, with Zesa failing to pay for coal supplies locally and from regional suppliers such as Eskom in foreign currency.

"It is therefore critical for the power utility to adjust prices gradually so as to break even or fully fund imports without accruing debt. The tariff has to be cost reflective at all the times in order to guarantee stable power supply," he added.