Zimbabwe Telecom Tariffs Skyrocket, Strain Consumers

News Category: Business

by Victor Adetimilehin

Telecommunication tariffs in Zimbabwe have experienced a dramatic surge, putting immense pressure on consumers and sparking concerns within the industry. The Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has hiked data and voice tariffs by more than double, marking the third increase this year, all in a bid to salvage the beleaguered sector amidst severe currency depreciation.


Since April, Zimbabwe’s local currency has depreciated by a staggering 444% against the US dollar, with the exchange rate reaching US$1 to ZWL$5,695.92. To counteract this economic turmoil, telecom providers found it necessary to adjust their prices to maintain the value of their services.


Potraz director-general Gift Machengete stated that these tariff reviews were prompted by the Transitions Performance Index, a tool used to determine the cost of delivering telecommunications services. The latest computations in February and April 2023 revealed that the previous tariffs of ZWL$94.41 for voice, ZWL$14.93 for data per megabyte, and ZWL$19.41 for SMS were no longer sustainable and fell well below regional averages.


As a result, the recent increments have pushed voice charges to US$0.40 per minute and data to US$0.63 per megabyte. Even with these adjustments, Zimbabwean tariffs still lag behind the regional average, creating challenges in maintaining service quality.


Although these changes may offer some relief to telecommunications providers in terms of their costs, the burden falls heavily on consumers. Most employees in both the public and private sectors are paid in the local currency, making the increased tariffs a substantial financial strain.


Local internet service provider, Liquid Home Zimbabwe, has already notified its clients of a 100% data price increase set to take effect at the beginning of the next month, with another 50% increment scheduled for December 1, 2023.


The problem at the heart of these price increases lies in the dominance of monopolistic interests in the telecom and internet sector, as highlighted in a February 2022 report by the Zimbabwe Coalition on Debt and Development. Private sector players have justified the price hikes by citing various factors, including adjustments by Potraz, rising operating costs, power shortages, and widespread vandalism of infrastructure.


Without effective regulation and consumer protection mechanisms, rising internet charges threaten to exacerbate poverty among Zimbabweans.


In conclusion, the recent tariff hikes in Zimbabwe’s telecom sector have exacerbated the financial struggles of consumers and highlighted the need for comprehensive regulatory reforms. The monopolistic interests dominating the sector and the adverse economic conditions have combined to create a challenging environment. As the industry grapples with these challenges, a brighter future may emerge through improved oversight and policies that prioritize both affordability and quality of service.


Source:[Newsday Zimbabwe]

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