Econet barred from increasing tariffs

The Administrative Court has barred Econet, the country’s largest mobile phone operator, from increasing tariffs from the current 15 cents a minute to 21 cents.

The country’s mobile phone operators- Econet, NetOne and Telecel- were ordered by the Posts and Telecommunications Regulatory Authority to reduce tariffs from 23 cents a minute to 15 cents at the beginning of this year.

POTRAZ further said the operators must reduce the tariffs to 12 cents a minute next year and 9 cents a minute in 2017.

The POTRAZ directive followed a study of tariff structures in the region in which all three mobile operators participated.

According to The Chronicle, Econet took the regulatory authority to court arguing that it could not charge the same rates as the other two operators because it had paid its licence in full. It also argued that the regulatory determination setting tariff thresholds was discriminatory.

Econet, which has more than 60 percent of the mobile phone subscribers, has been reeling under the new tariffs which have seen its profits plummet by 52 percent to $23 million for the six months to August.

The operator also instituted a 20 percent salary cut, retrenched about 100 employees and demanded a 15 percent price reduction from suppliers to stay afloat.

According to Forbes, Econet’s value plunged by 63 percent from last year resulting in its boss Strive Masiyiwa dropping out of the 50 richest Africans list, though the minimum net worth had dropped from $510 million to $330 million.

Masiyiwa’s net-worth was previously put at $600 million.

(56 VIEWS)