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Potraz happy with tariff hikes

by Staff reporter
15 Jul 2022 at 09:05hrs | Views
THE Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has given telecommunications network service operators the nod to increase tariffs in keeping with the rising costs to ensure sustainability of the sector.

However, the telecoms regulator said it would remain cautious of the need to guarantee service affordability for subscribers given that disposable incomes remain under pressure.

Responding to questions from Business Chronicle, Potraz director general, Dr Gift Machengete, said the tariff review was necessary as failure to do so would adversely affect operator viability, which would lead to poor quality services, threat of job losses and risk of companies having to fold up.

"Potraz sets and reviews tariffs using a cost-based model called the Telecommunications Price Index (TPI) where the cost-of-service provision is computed to come up with a tariff that best ensures operator viability as well as consumer affordability," said Dr Machengete.

"Using January to June 2021 cost information, the authority last reviewed tariffs using this model in September 2021.

"There has been a lot of developments in the sector, which have affected the cost-of-service provision since then, chief among these changes is the exchange rate depreciation from US$1: $88 in June 2021 to the current US$1: $379," he said.

Dr Machengete said the telecommunications sector requires a lot of foreign currency for licence fees, system upgrades and equipment replacements, hence the movements in the exchange rate, coupled with the general shortage of forex on the market and the limited allocations by the Reserve Bank of Zimbabwe (RBZ), have been heavily affecting the sector.

"The introduction of the willing buyer – willing seller exchange rate also means costs are increasing regularly in tandem with exchange rate movements," he said.

"Fuel has also increased from US$1,38 in June 2021 to US$1,88 currently obtaining in the market.

"These cost developments called for review of headline tariffs to maintain operator viability. In order to ensure service affordability and avoid market shock, the proposed tariff changes using the TPI would be staggered," said Dr Machengete.

Telecoms operators have already notified their clients of the imminent increases. In a statement, Liquid Intelligent Technologies advised its value customers that new tariff will be effected today.

"Liquid Intelligent Technologies Zimbabwe would like to advise you of a price increase of 61 percent on our products and services with effect from 14 July 2022 in accordance with Potraz approval," reads the statement.
Econet Zimbabwe has also sent notifications to its subscribers updating them on the new development citing that the new tariffs will be effective yesterday.

"Dear valued customers, please note the following tariffs as per regulatory approval, effective 13 July 2022.

"Voice – $0,2686 per second, data -$2,5522 per megabyte and Short Messaging Service (SMS) – $3,3137 per SMS," said the company.

Other network providers are yet to announce their increases.

Source - The Chronicle
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