Tariff increase will heavily impact revenue

By Staff reporter | 29 Mar 2019 at 16:53hrs
Tariff
The current request by Mobile Network Operators (MNOs) to heavily increase their tariffs as at 1 April 2019 using the current trading rate may appear as if its a good initiative to boost the troubled telecommunications sector but in the long run, the same move will greatly affect operations for all mobile network operators.

Zimbabwe mobile consumers who at large are already reeling under serious economic pressure and low incomes will not be able to afford communication at 150% increase which under ITU is enshrined as a basic human right, however, it will soon become a luxury for many.

While Potraz and the MNOs are currently fighting over the best model to adjust the current tariffs, it is also very key to remember that the same consumers are currently reeling under serious economic pressures after the pronouncement of the Monetary Policy which has resulted in the devaluation of the local currency, which basically has eroded savings.

The Average Revenue Per User (ARPU) according to the last quarter is $5.58 from $5.92 recorded in the third Quarter of 2018. This indicates a decrease in what users are able to spend in a month. A number that is likely to continue spiralling down.

This means that most Zimbabwean subscribers are not going to be able to sustain a 250-300% tariff increase should the figures suggested by MNOs get approved.

Basically, the MNOs are going to be shooting their own feet, especially after having a 43 million revenue dip recorded in the 34th Quarter of 2018. This will affect revenue outcomes, as the number will continue going down

Of course the biggest the problem is not with the tariff wars that we are now experiencing, but these are just effects of the recent monetary policy, which hoodwinked business as they only cushioned the Reserve Bank against inflationary pressures, while businesses were exposed, hence the effects are now biting.

LATEST NEWS

PARTNER CONTENT