New mobile tariffs to benefit both users and operators

The introduction of new mobile voice tariffs will benefit  network users and service providers equally, an official with the Postal and Regulatory Authority of Zimbabwe (POTRAZ) said yesterday, denying that the new charges will reduce revenue for the already struggling sector.

POTRAZ has directed mobile network operators to cut their voice tariffs to 15 cents per minute from the current 23 cents with effect from December after adopting a new pricing model.

“The issue of reducing voice tariffs would not affect the mobile network providers’ revenues in a negative way, but it will make their customers pay for what they are getting,” POTRAZ economics and financial analyst Talent Munyaradzi said.

“It’s not like we are forcing the network providers to adopt the new tariffs but this is a process where the network providers are consulted by the regulator to reach an agreement on the new tariffs which can be implemented.”

POTRAZ  said in October that it had abandoned the COSITU pricing framework – an International Telecommunications Union’s model for the determination of costs and tariffs (including interconnection and accounting rates) for telephone services — in favour of a long run incremental cost (LRIC) model, which will see tariffs progressively coming down in response to an ‘outcry’ by consumers.

“There are a lot of factors which are considered in implementing tariffs. The telecommunication players have invested a lot but customers must be considered as well as the economic situation in the country when it comes to mobile network tariffs,” said Munyaradzi.

The tariff will be further adjusted to 12 cents per minute in 2015 and nine cents per minute in 2016. The interconnect rate will come down from the current seven cents to five cents in December 2014, four cents in 2015 and ultimately three cents by 2016.

Potraz’s directive will likely eat into the revenues of an industry that is already battling rising costs.

Latest statistics on the regulator’s site shows that mobile operators generated $250 million in revenue in the final quarter of 2013, with only market leader Econet increasing its share of the revenue cake, while the other two players – Telecel and NetOne — saw two percent and one percent declines in their share of revenue, compared with the previous quarter’s figures.-The Source

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