No tariff hies approved yet, says Potraz

By Staff reporter | 21 Mar 2019 at 09:45hrs
Dr Machengete
THE Postal and Telecommunications Regulatory Authority (Potraz) has not approved any local tariff increases for voice and internet as well as data services, director general Dr Gift Machengete has said.

This comes as the country has been experiencing wanton increase in prices of commodities and services since October last year.

Some service providers in the telecommunications industry have, however, doubled tariffs for internet and data services. Dr Machengete said the regulator had received applications from operators for an upward review of tariffs and was still looking at them.

"We have not approved any local tariff increases, we are still looking at the matter. We have received applications but have not approved any at the moment. We now have a board after six months without one and this is one of the issues the book will look at," said Dr Machengete.

He said a review of tariffs would factor in the economic environment the sector operates.

Meanwhile, total postal and telecommunications revenue for financial year 2018 jumped 4o percent to $1,5 billion from $1,1 billion recorded in 2017 on the back of growth in mobile data and internet services as well as mobile revenue growth.

Internet and data usage in the country has been on a growth trajectory since 2012 and is expected to continue growing. Between 2012 and 2018, data traffic grew from 29 million megabytes to 27 billion megabytes. At $1,155 million, mobile revenue was 36 percent above prior year, which recorded $0,849 million on the back of growth in voice traffic Total voice traffic grew 20 percent to 5,3 billion minutes.

"The growth in voice traffic in 2018 is attributable to the 454 percent growth in on-net traffic because of promotions offering bonus minutes for calls within the same network" said Dr Machengete.

During the period under review, short messaging service (sMs) volumes grew 31,2 percent to Lis mil-lion on the back of growing use of digital financial services as notifications are sent via sms. On the other hand, postal and courier revenues declined by 13,9 percent to $35 million compared to $40 million recorded in 2017 as the market continues to shun postal mail services preferring internet based messaging and voice that are relatively cheaper and faster.

Figures from Potraz show that intern et penetration has maintained an upward trend since 2009 where it was 5,1 percent to 62,9 percent in 2018.

Said Dr Machengete: "The internet penetration rate has been consistently increasing due to the growing demand for internet and data services. Demand for internet and data services in the country is expected to continue growing as the internet coverage, variety of services and the availability and accessibility of devices improves."

Total capital expenditure for the year declined 18 percent to $160 million as the obtaining economic challenges characterised by foreign currency challenges took its toll on the sector.

On a quarterly basis, fixed voice traffic declined by 3,3 percent during the fourth quarter of 2018 to 113 million minutes from 116,8 million minutes recorded in the previous quarter.

Fixed telephone revenue increased by 9,8 percent to $38 million mobile telephone revenue declined by 13,3 percent to $287 million. Active mobile subscriptions increased by 1,3 in the quarter to record 12 908 992 from 12 748 551 recorded in the third quarter of 2018.

The mobile penetration rate increased by la percent to reach 93,1 percent from 91,9 percent recorded in the third quarter of 2018. Like any other sector of the economy, the postal and telecoms sector performance will be dependent general economic environment such as service demand and consumption levels, operating costs, investment among others. "The current inflationary pressures in the economy pose a threat to operator viability and puts pressure on prices.

"This may in turn impact demand for postal and telecommunication services as consumers reduce usage," said Dr Machengete.

Data and internet services are expected to con-tinue to drive industry growth, exceeding the revenue contribution of voice service.

The use of Over-the-Top services is expected to grow as consumers cut back on personal expenditure. The decline in postal volumes is expected to continue to decline. The principal cause of the decline in letter volumes has been the substitution of paper communication by electronic methods.

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