Regulatory standoff between Potraz and Mobile Network Operators in Zimbabwe

Teboho Bosiu

The Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) set floor prices for data and voice services including promotional packages, effective in January 2017. The floor prices are set at $0.12 per minute for voice services, and $0.02 per megabyte for data. Initially data prices were below $0.01 per megabyte.

The floor prices are said to be aimed at ensuring the sustainability of the industry by addressing the apparent under-pricing of data and voice services as a result of price wars. The standoff resulted from a wide consumer outcry that led to blame-shifting between MNOs and government regarding who proposed the floor prices, which were in some cases set above the prevailing price levels. The Minister of ICT has since suspended the tariff increases.

In spite of who had initially proposed the floor prices, this is a setback to achieving a competitive telecoms industry especially if the floor prices are above competitive prices currently or in future as costs and demand shift. The intervention is likely to negate some of the gains from previous regulatory changes aimed at improving competitive outcomes in the industry in Zimbabwe, including interventions that reduced rates charged to banks for USSD access.

More recently POTRAZ proposed a compulsory sharing of the network infrastructure, in recognition of the need to manage the high costs of infrastructure rollout particularly for new entrants. It may be the case that MNOs had experienced rising costs which necessitated higher prices in the market, although it would be expected that the MNOs themselves would raises tariffs such that increases would reflect their respective cost structures which are largely different.