Zimdollar recovery diminishes telecommunications services providers' tariff hikes prospects

THE steady recovery of the ZW$ in recent weeks almost diminishes recent calls by mobile telecommunications services providers, making it difficult to ascertain where exactly to place the peg.

To date, both the parallel and official market exchange rates have retreated extensively, recovering by almost 40% since the time premiums reached a high US$1: ZW$ 7 500 early last month.

However, the gains fly in the face of telecommunications services providers who continue to bemoan the inconsistencies between tariffs and economic realities.

This week, leading telecommunications services provider, presenting a trading update for the quarter ended May 31 2023 Econet Wireless Zimbabwe Limited (EWZL) group company secretary, Charles Banda raised the sector's pertinent issue.

"The last tariff review for the sector was carried out when the interbank rate was 1,000.02, which in comparison to the interbank rate of 2,577.06 at the close of the quarter under review was a significant depreciation of 158%," he said.

The Postal and Telecommunications Regulatory Authority (POTRAZ) last effected a 50% tariff increase around February 2023 after taking note of the fact that tariffs had remained significantly lower at the time.

But this time around, such calls fly in the face of an already agitated citizenry demanding responsible behavior and honesty on the part of businesses for the need to peg prices in a manner reflective of the fundamentals.

Market watchers are also of the view that the upgrade of Hwange Power Station unit 7 added 300MW of power to the national grid which has resulted in an improvement of network availability and relative decline in costs to run on diesel are part of the pros not justifying huge tariff increases.