Opinion / Columnist
Post mortem of 'Data Prices' increase drama
14 Jan 2017 at 02:50hrs | Views
IT is very easy for people to reach wrong conclusions on certain matters because they would have been fed with wrong information. The first point to understand some of these items before drawing emotional conclusions is to have accurate facts. Unfortunately most people believe 80 percent of what they read on social media, be it true or false. Let me explain a few things and raise a few points and leave you to make an informed decision. I discuss publicly available information and use about two decades of my hands-on experience in ICT industry at the highest level.
The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) is mandated by an Act of Parliament to manage and regulate postal and telecommunication services in Zimbabwe. As their motto suggests "To create a level playing field".
As far as most of us know, POTRAZ usually holds consultative meetings with the public and key stakeholders before coming up with new regulations that affect the public. In any case all the telco operators would not exist if there are no customers. The same applies to POTRAZ. On October 16, 2014, in a circular to the industry, POTRAZ said it had abandoned the Cositu pricing framework — an International Telecommunications Union's model for the determination of costs and tariffs (including interconnection and accounting rates) for telephone services - in favour of a long run incremental cost (LRIC) model, which will see tariffs progressively coming down in response to a public outcry by consumers.
Read again - coming down progressively. Cellular mobile operators were directed to cut their voice tariffs in line with the new model on December 2014.
However, data charges would be determined by market forces. In the report, POTRAZ directed tariffs to be further adjusted to 12c per minute in 2015, and then 9c in 2016. The interconnection rate, which had been 7c for several years, would be reduced to 5c in December, 4c in 2015 and 3c by 2016. So what has changed? A new board was appointed. A new director general was appointed after years of different executives rotating as acting DGs. This itself had catastrophic results as each acting DG was not given enough time to make and follow up key strategic decisions he or she made. One of which was the abolishment of the new Research and Development Department.
Fast forward December 12, 2017, POTRAZ publicly announces new floor prices for both data and voice for the mobile network operators (MNOs). A floor price is the minimum chargeable per minute of voice and per megabyte of data price. According to that communication by POTRAZ in December, the floor prices would 12c for voice and 2c for data. What is clear the voice floor rate of 12c per minute was agreed upon across the board including the MNOs under their umbrella Telecommunications Operators' Association of Zimbabwe (TOAZ). The burning issue was and is data rates. The cost of a megabyte, data bundles. Now this is a tricky one as different players have different interests in the data price. Some players want it go up and others down all for different reasons. Let us get surgical about this.
Data Rates
The entry of Over The Top Services (OTT) caught both the regulator, the Government and operators flat-footed. They woke up and boom there was a cheaper, faster, efficient and more secure means of communication over night. Yes Whatsapp and of course Facebook, Twitter and gang loosely termed social media. Now use of social media rose exponentially and understandably so in a country facing economic challenges where $1 is a lot of money literally. But its growth affected three categories differently. The Government, MNOs and the consumers. The consumer was naturally excited as he could communicate more for less. MNOs were now losing voice revenue to these news services.
Government
The Government might have been worried about the potential abuse of social media. Some in human rights arena think that it is a way to regulate social media usage especially ahead of 2018 elections. This is disturbing considering that only recently Government issued a warning statement to the effect "that anyone caught or sharing abusive and subversive material on social media will be disconnected from using the country's mobile networks". A person does not need a local MNO SIM card to use Whatsapp of FB or Twitter. A SIM card registered in SA, Botswana, UK and yes USA. Who is offering technical advice to the authorities? Cyber arena is not like the ground and air incidents where roadblocks can be mounted. People can use encrypted communication tools If they want to. They can use TOR or ONION. Government is looking in the wrong direction. I for one am against anyone or any group who abuses social media. But the freedom of expression of opinions is NOT one of them. Also the "tech gurus" in Government earning fat cheques forget that more people in the Diaspora post on social media than locals. So will Government fly to each of these estimated three million Zimbabweans living abroad who express their opinion online? Some shake up is needed in some of these organisations and get in technical people who know what is technically possible and what is not. If you think the Chinese approach will help, I have bad news for you. It will not, that is a subject for another day. The Minister of Information Communications Technology, Postal and Courier Services under which POTRAZ falls, stated on July 7 last year that "We have no business in shutting down social media".
Government must engage citizens and encourage debate on issues that have to do the social media. It is not going anywhere anytime soon. OK. How do you resuscitate an economy using ZIMDEF when people's affordable means of communication is compromised? How do I communicate with my potential suppliers or customers as I used to at these new very high data rates? But since this was a directive from POTRAZ of which TOAZ were complicit to in a meeting held last October, a few tricky scenarios arise. For Econet if they fail to abide by the new regulation they would be fined — heavily. As for Netone and Telecel it is anybody's guess what their fate is if they do not comply — they are Government-owned. Who is fooling who?
Operators
These fellows were in deep slumber enjoying and reaping heaps of voice generated revenues at very exorbitant prices. When the OTT came aboard they were shell-shocked and started screaming and crying. This is what you get when you do not invest a portion of your returns into research and development of current and future technologies. I speak from a position of authority having worked in the world's largest lab in Silicon Valley eight years ago.
Companies like AT&T, Verizon, Sprint among others worked around the clock to ready themselves against the effect of the disruptive technologies like instant messaging and VoIP. On the data price scene naturally MNOs want the rates to go up as they feel OTT services are eating into their voice revenue streams. In a few years' time there won't be such a thing called international calling. We are going IP all the way. Like it or not start diversifying, add more VAS and diversify. Invest heavily into research and development (R&D). Innovate or die. You have had a free run in a very long time. Secondly be careful not to be too greedy. Increased data rates will mean less data traffic usage and less revenue. Cut costs. Share passive infrastructure as POTRAZ has been advising you. When you cut costs you effectively increase your margins. I find it awkward that you are very quick to agree on price increases as TOAZ but very reluctant to share infrastructure.
Consumers
This is a people that are already overburdened by a very harsh economy, scarce currency, low manufacturing capacity, drought and famine in some areas, no jobs, tollgates, and so to add this communication burden is like pouring a mixture of vinegar, salt and hot chilli on an open wound. Our constitution is very clear on our inalienable rights of freedom of association and speech and the like. But this has to be done responsibly. Make sure that what you post on social media you can even say in public. What I have written here I can repeat verbatim on TV, radio or face to face. People must not hide behind the anonymous nature of the internet to post profanities. That is a sure sign of "ubugwala" a Ndebele term for cowardice. Real men and women confront and discuss issues as they are, with no fear or favour. Responsible "social mediating". Also do not be used by people with their own agendas. Think for your self, do not be remotely controlled.
Potraz
This is an organisation caught between a rock and two hard places. The Government, the operators and the consumers. There is no easy way out of this.
Different sections are interested in the operations of POTRAZ for different reasons. One section says they are into it for national security. Yes, even in the USA there is NASA. Some naturally love the regulator's financial status. Cash cow in an environment of dismally performing parastatals. Some want to use POTRAZ as a vehicle for ICT Innovation. And others just to shoot down anything owned by current government. This regulator is professionally run but their hands are tied. This is not NRZ kind of entity. But why don't the security and law enforcement guys set up their own cyber security intelligence unit and leave POTRAZ alone. Yes you got me right. This causes conflict of interests. Leave POTRAZ to ICT Ministry. The ICT Minister announced an Innovation fund and some of us were already salivating at this thinking of developing home brewed technologies and applications to safeguard our economy and nation. At the same time acquire global skills and create employment. There is a shortage of forensic analysts, data miners, artificial intelligence experts and here we are stuck fighting wrong battles. A bold decision must be made taken to leave POTRAZ and its professional staff alone.
Final word
Dear Director General Dr Machengete. Congratulations on your new appointment. You are still knew at POTRAZ. Some decisions were made long before you came aboard so consult as wide as possible before going public or making public statements. Some of us offer free technical advice. Case in point Zimbabwe has been landlocked ever since Adam and Eve took a bite at that apple. So the reason of data prices going up due to being landlocked is not the best one sir. Rwanda and Burundi are very landlocked and look at their data rates. We have Liquid, Telone, Powertel, Telecontract and Africom operating optical networks. And by the way once installed there is not much maintenance cost. Also light travels at about 3 000 000 m/s. So distance alone is no longer a major cost factor. Let market forces come into play. Be bold you are the DG and NOT acting DG. Engage operators, the board, the public and the Ministry and pre-empt conflicting issues you will have from Government, operators and the general public. You know it, the data rates are way too high. Great job on CICs that are being rolled out. Something good coming out of USF fund. Compliments of the New Season.
Feedback
Twitter: @robertndlovu
WhatsApp: + 1 650 200 0250
The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) is mandated by an Act of Parliament to manage and regulate postal and telecommunication services in Zimbabwe. As their motto suggests "To create a level playing field".
As far as most of us know, POTRAZ usually holds consultative meetings with the public and key stakeholders before coming up with new regulations that affect the public. In any case all the telco operators would not exist if there are no customers. The same applies to POTRAZ. On October 16, 2014, in a circular to the industry, POTRAZ said it had abandoned the Cositu pricing framework — an International Telecommunications Union's model for the determination of costs and tariffs (including interconnection and accounting rates) for telephone services - in favour of a long run incremental cost (LRIC) model, which will see tariffs progressively coming down in response to a public outcry by consumers.
Read again - coming down progressively. Cellular mobile operators were directed to cut their voice tariffs in line with the new model on December 2014.
However, data charges would be determined by market forces. In the report, POTRAZ directed tariffs to be further adjusted to 12c per minute in 2015, and then 9c in 2016. The interconnection rate, which had been 7c for several years, would be reduced to 5c in December, 4c in 2015 and 3c by 2016. So what has changed? A new board was appointed. A new director general was appointed after years of different executives rotating as acting DGs. This itself had catastrophic results as each acting DG was not given enough time to make and follow up key strategic decisions he or she made. One of which was the abolishment of the new Research and Development Department.
Fast forward December 12, 2017, POTRAZ publicly announces new floor prices for both data and voice for the mobile network operators (MNOs). A floor price is the minimum chargeable per minute of voice and per megabyte of data price. According to that communication by POTRAZ in December, the floor prices would 12c for voice and 2c for data. What is clear the voice floor rate of 12c per minute was agreed upon across the board including the MNOs under their umbrella Telecommunications Operators' Association of Zimbabwe (TOAZ). The burning issue was and is data rates. The cost of a megabyte, data bundles. Now this is a tricky one as different players have different interests in the data price. Some players want it go up and others down all for different reasons. Let us get surgical about this.
Data Rates
The entry of Over The Top Services (OTT) caught both the regulator, the Government and operators flat-footed. They woke up and boom there was a cheaper, faster, efficient and more secure means of communication over night. Yes Whatsapp and of course Facebook, Twitter and gang loosely termed social media. Now use of social media rose exponentially and understandably so in a country facing economic challenges where $1 is a lot of money literally. But its growth affected three categories differently. The Government, MNOs and the consumers. The consumer was naturally excited as he could communicate more for less. MNOs were now losing voice revenue to these news services.
Government
The Government might have been worried about the potential abuse of social media. Some in human rights arena think that it is a way to regulate social media usage especially ahead of 2018 elections. This is disturbing considering that only recently Government issued a warning statement to the effect "that anyone caught or sharing abusive and subversive material on social media will be disconnected from using the country's mobile networks". A person does not need a local MNO SIM card to use Whatsapp of FB or Twitter. A SIM card registered in SA, Botswana, UK and yes USA. Who is offering technical advice to the authorities? Cyber arena is not like the ground and air incidents where roadblocks can be mounted. People can use encrypted communication tools If they want to. They can use TOR or ONION. Government is looking in the wrong direction. I for one am against anyone or any group who abuses social media. But the freedom of expression of opinions is NOT one of them. Also the "tech gurus" in Government earning fat cheques forget that more people in the Diaspora post on social media than locals. So will Government fly to each of these estimated three million Zimbabweans living abroad who express their opinion online? Some shake up is needed in some of these organisations and get in technical people who know what is technically possible and what is not. If you think the Chinese approach will help, I have bad news for you. It will not, that is a subject for another day. The Minister of Information Communications Technology, Postal and Courier Services under which POTRAZ falls, stated on July 7 last year that "We have no business in shutting down social media".
Government must engage citizens and encourage debate on issues that have to do the social media. It is not going anywhere anytime soon. OK. How do you resuscitate an economy using ZIMDEF when people's affordable means of communication is compromised? How do I communicate with my potential suppliers or customers as I used to at these new very high data rates? But since this was a directive from POTRAZ of which TOAZ were complicit to in a meeting held last October, a few tricky scenarios arise. For Econet if they fail to abide by the new regulation they would be fined — heavily. As for Netone and Telecel it is anybody's guess what their fate is if they do not comply — they are Government-owned. Who is fooling who?
Operators
These fellows were in deep slumber enjoying and reaping heaps of voice generated revenues at very exorbitant prices. When the OTT came aboard they were shell-shocked and started screaming and crying. This is what you get when you do not invest a portion of your returns into research and development of current and future technologies. I speak from a position of authority having worked in the world's largest lab in Silicon Valley eight years ago.
Companies like AT&T, Verizon, Sprint among others worked around the clock to ready themselves against the effect of the disruptive technologies like instant messaging and VoIP. On the data price scene naturally MNOs want the rates to go up as they feel OTT services are eating into their voice revenue streams. In a few years' time there won't be such a thing called international calling. We are going IP all the way. Like it or not start diversifying, add more VAS and diversify. Invest heavily into research and development (R&D). Innovate or die. You have had a free run in a very long time. Secondly be careful not to be too greedy. Increased data rates will mean less data traffic usage and less revenue. Cut costs. Share passive infrastructure as POTRAZ has been advising you. When you cut costs you effectively increase your margins. I find it awkward that you are very quick to agree on price increases as TOAZ but very reluctant to share infrastructure.
Consumers
This is a people that are already overburdened by a very harsh economy, scarce currency, low manufacturing capacity, drought and famine in some areas, no jobs, tollgates, and so to add this communication burden is like pouring a mixture of vinegar, salt and hot chilli on an open wound. Our constitution is very clear on our inalienable rights of freedom of association and speech and the like. But this has to be done responsibly. Make sure that what you post on social media you can even say in public. What I have written here I can repeat verbatim on TV, radio or face to face. People must not hide behind the anonymous nature of the internet to post profanities. That is a sure sign of "ubugwala" a Ndebele term for cowardice. Real men and women confront and discuss issues as they are, with no fear or favour. Responsible "social mediating". Also do not be used by people with their own agendas. Think for your self, do not be remotely controlled.
Potraz
This is an organisation caught between a rock and two hard places. The Government, the operators and the consumers. There is no easy way out of this.
Different sections are interested in the operations of POTRAZ for different reasons. One section says they are into it for national security. Yes, even in the USA there is NASA. Some naturally love the regulator's financial status. Cash cow in an environment of dismally performing parastatals. Some want to use POTRAZ as a vehicle for ICT Innovation. And others just to shoot down anything owned by current government. This regulator is professionally run but their hands are tied. This is not NRZ kind of entity. But why don't the security and law enforcement guys set up their own cyber security intelligence unit and leave POTRAZ alone. Yes you got me right. This causes conflict of interests. Leave POTRAZ to ICT Ministry. The ICT Minister announced an Innovation fund and some of us were already salivating at this thinking of developing home brewed technologies and applications to safeguard our economy and nation. At the same time acquire global skills and create employment. There is a shortage of forensic analysts, data miners, artificial intelligence experts and here we are stuck fighting wrong battles. A bold decision must be made taken to leave POTRAZ and its professional staff alone.
Final word
Dear Director General Dr Machengete. Congratulations on your new appointment. You are still knew at POTRAZ. Some decisions were made long before you came aboard so consult as wide as possible before going public or making public statements. Some of us offer free technical advice. Case in point Zimbabwe has been landlocked ever since Adam and Eve took a bite at that apple. So the reason of data prices going up due to being landlocked is not the best one sir. Rwanda and Burundi are very landlocked and look at their data rates. We have Liquid, Telone, Powertel, Telecontract and Africom operating optical networks. And by the way once installed there is not much maintenance cost. Also light travels at about 3 000 000 m/s. So distance alone is no longer a major cost factor. Let market forces come into play. Be bold you are the DG and NOT acting DG. Engage operators, the board, the public and the Ministry and pre-empt conflicting issues you will have from Government, operators and the general public. You know it, the data rates are way too high. Great job on CICs that are being rolled out. Something good coming out of USF fund. Compliments of the New Season.
Feedback
Twitter: @robertndlovu
WhatsApp: + 1 650 200 0250
Source - Robert Ndlovu
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