POTRAZ Defends Exorbitant NetOne Tariff Increases

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By Anna Chibamu and Lisa Nyanhongo

THE Postal and Telecommunications Regulatory Authority of Zimbabwe, (POTRAZ), on Monday told the Parliamentary Committee on Information, Communication Technology (ICT), that the state mobile network operator, NetOne’s  tariff increment of 572% last month was within its regulation limits.

POTRAZ director-general, Gift Calisto Machengete, told the ICT committee that data tariffs were charged in a threshold, but the mobile network companies can decide how to implement those changes.

Responding to questions from the committee members on why NetOne had charged high data tariffs and later reduced the charges overnight, Machengete stated that operators such as NetOne were free to position themselves where they want in terms of charges that are within the regulatory body’s legislation.

Machengete, however, bemoaned the low salaries being earned by most public employees in the country, saying the cost of tariffs goes hand in hand with incomes, so the high costs of data would affect the majority of low-income earners.

“We set up to a threshold. We do not set the minimum tariff but only the maximum tariff. Operators decide where they can position themselves. They (NetOne) did not go with what was not legislated, neither did POTRAZ order them to reduce the tariff,” Machengete said.

The director-general, however, also revealed that the level of salaries in Zimbabwe was currently very low for POTRAZ to set up high tariffs.

“We look at public incomes. For it to be effective, we look at the amount of tariff by service providers.

“On the pricing structure, we try and guard against excessive pricing by operators. If they are left on their own, they will charge whatever price they will charge so regulators then have to fix the tariff. They cannot just charge what they want. But in order to do so, we need to use scientific methods of coming up with the tariffs to also satisfy the operators themselves.

“We, however, have to balance this with affordability, i.e whether people will be able to afford it. Unfortunately, for a long time, salaries have been eroded and not much has happened on that side. As a result, you now need to have a balancing act that at least the service is provided as well as people affording the service,” added Machengete.

He highlighted that the current running tariffs were based on costs for August 2021.

“A lot of people have come to me questioning whether we look at their income when deciding on these tariffs; Yes, we do as some adjustment depend on the amount of traffic that operators have and we try and have this balancing act.

“We use the Telecommunication Price Index (TPI) where we look at the cost of providing the service. How much is it in terms of cost that is needed for you to be able to provide a service. So, it is cost based.  When we get the cost, we then come up with the tariff that makes the cost covered which makes the operator remain in business.”

The Acting permanent secretary, Beaular Chirume, also chipped in, highlighting that data costs would remain high as the country is landlocked, with low expectations in service improvement due to lack of foreign currency.