Global and local economic issues hit Zimbabwe’s operators

Global and local economic issues hit Zimbabwe’s operators

Less than a year after the last review, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has allowed operators to raise their tariffs.

This is not entirely surprising. Global economic issue are a problem, but Zimbabwe has long suffered from its own economic woes and, with inflation rising, local currency value falling, steeper energy costs and a strong reliance on foreign currency, this move was probably inevitable.

According to the Zimbabwe Daily News, since the last tariff adjustment in September 2021, inflation has risen from 51.55 percent to over 191 percent in June 2022. Electricity costs, meanwhile, have more than trebled and of course the price of diesel, essential during power cuts, has risen too. Vandalism is also a problem.

The dual currency system is another issue, making it difficult for operators to invest. As we pointed out in June, the unofficial or ‘street’ exchange rate is often used by suppliers as a way of fixing their prices to recoup their costs. Many businesses, including operators, have to use the official rate, which means they lose out.

What this means for TelOne, the State-owned fixed telecommunications service provider, which last month warned that it was facing collapse due to tariffs that didn’t reflect costs, is unclear, though it can at least raise its prices.

In fact Econet and TelOne have already announced price changes. In the aftermath of the POTRAZ decision some of Econet Wireless’s call rates are to rise by well over 50 percent; voice calls, for example, are rising from Z$10.01 per minute (US$0.027) to $16.11 (US$0.044)per minute. NetOne and Telecel are expected to follow soon.

Sign-up to our weekly newsletter

Keep up-to-date with all the latest news, articles, event and product updates posted on Developing Telecoms.
Subscribe to our FREE weekly email newsletters for the latest telecom info in developing and emerging markets globally.
Sending occasional e-mail from 3rd parties about industry white papers, online and live events relevant to subscribers helps us fund this website and free weekly newsletter. We never sell your personal data. Click here to view our privacy policy.