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Phone tariffs viable
Tandayi Motsi, The Herald (Zimbabwe)
February 06, 2007

http://www1.herald.co.zw/inside.aspx?sectid=14932&cat=8

THE Postal and Telecommunications Regulatory Authority of Zimbabwe said yesterday the current mobile phone tariffs were economically viable and commensurate with regional rates.

This followed claims by the mobile phone operators that the authority was letting them down by refusing to gazette competitive and viable tariffs.

Potraz acting director-general Mr Gideon Magodo told the Parliamentary Portfolio Committee on Transport and Communications that the tariffs were justified.

"We think the tariffs are reasonable based on the input costs," he said.

Mr Magodo said this during a briefing with the committee on challenges being faced by the telecoms industry players in their bid to expand the mobile and fixed phone networks.

Also attending the meeting was Acting Secretary for Transport and Communications Dr Amos Makarau.

At an average of $77,60 peak and off-peak rate for regional calls, Econet, Telecel and NetOne — Zimbabwe’s three mobile firms — argue the tariffs are a slap in the face when viewed against the international gateway cost component of US$0,15.

Local calls through all mobile network service providers now range between $76 and $117 per minute.

Before the latest increase, charges for making local calls ranged between $36 and $69 during peak and off-peak periods.

Mr Magodo said the authority used a model in reviewing the tariffs and this was based on input costs submitted by the operators.

However, the service providers told the same committee last week that the model could not apply in an environment, where annual inflation was running at more than 1 000 percent.

Mr Magodo explained the calculations were based on the official foreign currency exchange rate.

"It is an area which I think has to do with the exchange rate which is beyond our control," he said.

Tsholotsho MP Professor Jonathan Moyo (Independent) asked the rationale forcalculating the tariffs using the official rate when the operators were sourcing foreign currency on the black market to buy materials.

In response, Potraz director of finance Mr Alfred Marisa said the authority, as an arm of Government, could not be seen going against State policy.

He said operators who were turning to the black market to source foreign currency should be arrested since they were committing a crime.

The authority, Mr Marisa said, had a mammoth task of ensuring that consumers were not ripped off while service providers had, at the same time, to remain viable.

"We are working with the operators so that we cannot expose customers to profiteering," he said.

Presenting his monetary policy statement last week, Reserve Bank of Zimbabwe governor Dr Gideon Gono shared industry’s view that the international call termination charges currently being charged by the sector were too low. He singled out TelOne which, he said, continued to incur net debts in foreign exchange, threatening the stability and availability of the country’s connectivity with the rest of the world.

The parliamentarians also wanted to know Potraz’s position on the possibility of introducing national roaming and the issue pertaining to the universal service fund which operators claimed the telecommunications authority was failing to account for.

The service providers contribute 2percent of their gross revenue to the fund, which is meant to develop under-serviced areas.

Mr Marisa said about $538 million had been contributed towards the fund from 2002 to 2005 but the funds were yet to be spent.

Chitungwiza Senator Mr Forbes Magadu (Zanu-PF) quizzed the Potraz senior officials on why it had taken so long to use the funds.

Mr Magodo said the authority was still working on modalities to operationalise the fund.

However, Dr Makarau said Government had given the authority the green light to utilise the funds as the purpose of the fund was clearly spelt out in the legislation governing Potraz’s operations.

"We have asked Potraz to discuss with the stakeholders on the utilisation of the funds," he said.

Government, Dr Makarau said, had also embarked on a programme to restructure the regulatory body in order to make it more effective in carrying out its mandate.

He dismissed reports that another mobile service provider, Vodacom, would soon be entering the market.

Dr Makarau said the ministry and also discussed the issue with the mobile operators who professed ignorance about reports suggesting possible partnerships with Vodacom.

On national roaming, Mr Magodo said the authority would liaise with the service providers on how best to implement the project. He said in terms of network expansion, on the side of mobile operators the rollout programme was on track.

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