POTRAZ fails to defend data tariff hikes, even contradicts itself

Following the announcement on the increase of Floor Prices for voice and data; here are some questions and answers to provide further clarity;

Q1. POTRAZ has set floor prices for voice and data for bundled services including promotional packages from January 9. The floor prices are 12c per minute for voice and 2c per megabyte for data. What motivated the introduction of these floor

A1. POTRAZ, has a mandate in terms of section 4 of the Postal and Telecommunications Act Chapter 12:05 to ensure sustainable and consistent provision of domestic and international telecommunication services. Therefore, the introduction of floor prices will ensure consistent and sustainable long-term provision of services to all Zimbabweans.

Q2. How will floor prices solve the issue of a reduction of revenue realised by mobile  network operators?

A2. Floor pricing does not only focus on revenue, but on sustaining long-term provision of service to consumers throughout the Country.

Q3. Does setting a floor price not stifle innovation in the telecommunications sector and put the burden of reduced revenue on the consumer by making them pay more for data services?

A3. One of POTRAZ’s mandates is to promote innovation. Therefore, the Authority has a duty to capacitate innovation drives in line with global technological developments by creating an enabling environment for the sector to provide innovative services, failure of which there would be no innovation to talk about.

Q4. Some members of the public have complained that the new floor prices make data specifically more expensive for example a 250mb daily bundle from Econet would essentially be priced at $5 and NetOne’s One Fusion package is likely to become more expensive. Why then would POTRAZ opt for tariffs that will make data more expensive for the consumer particularly in the prevailing economic climate?

A4. POTRAZ’s aim is to keep is the price of data as low as possible while ensuring sustainability of the sector and protection of consumers. The Authority’s intention in setting floor prices is, therefore, to maintain a delicate balance between service affordability by consumers and operator viability.

Q5. Last year in October, there were reports that POTRAZ intended to reduce the data tariff but now the opposite seems to be the case. How does POTRAZ reconcile the intention to reduce data tariffs, the third most expensive in Africa with these new floor prices?

A5. The Authority is currently carrying out studies to review the cost models used in tariff setting which were designed in 2014 to ensure fair pricing. The results of the study will guide any tariff changes.

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