Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) has approved an adjustment in voice tariffs for mobile network operators in a move analysts and market players believe will help forestall dim prospects in the telecoms sector.
Yesterday, Potraz released a circular announcing it had approved a tariff adjustment for voice calls by just over 182 percent from 17 cents per minute to 48 cents per minute on average, a move seen as a way of cushioning the industry from a plethora of challenges, including a weakening local currency against the US dollar and unprecedented power cuts that have almost brought the industry to its knees.
The Zimbabwean dollar has been weakening since the introduction of the interbank market back in February and is now trading at 1:10 from a parity rate of 1:1.
MNOs also have to contend with the cost of international bandwidth, an imported commodity, which must be settled in foreign currency. For mobile network operators, the need to continuously upgrade their networks, both hardware and software, means the availability of foreign currency is key.
The voice tariff adjustment also come at a time the cost of doing business has been increasing. Further the power crisis gripping the country has meant that operators have to resort to the use of expensive diesel-powered generators to maintain the uptime of base stations.
The price of diesel has been increasing over the months, and is now retailing at $9,06 a litre up from around $1,22 a litre at the start of the year. The use of generators also comes with the increased need to maintain and service them and the fleet of vehicles that have now increased the frequency of refuelling base stations.
As a result, the new tariffs are seen as in line with the prevailing price movements across various sectors of the economy, as the loss of value in the local currency following the new monetary policy has seen suppliers effecting price increases on their products and services - including those of the telecoms players' local suppliers.
"The adjustment in voice tariffs, is welcome as it moves MNOs closer to cost effective tariffs and is a direct response to the rise in service delivery costs across the industry," said an executive with a local mobile network operator.
"This will go a long way in allowing us to continue to deliver quality service, and for the industry to remain viable," he said.
While consumers can never be prepared for any price or tariff increase of any service or product, most subscribers must have seen this coming, given the monetary and inflationary changes in the economy and the deterioration of service quality over the past few months.