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BREAKING NEWS: POTRAZ orders Econet to revert to 25 cents per minute

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econet_vs_potrazIn an interesting twist to the ongoing mobile tariff wars in Zimbabwe, POTRAZ we are told, has today directed Econet to revert to the old punitive pricing of 25 cents per minutes for calls. We just got the information right now from an Econet spokesperson. This is the first time POTRAZ has reacted publicly to the tariff wars.

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“POTRAZ has ordered Econet to revert to the 25 cents tariff, and stop offering the 10c tariff by 4PM today (Tuesday).” said the communication we got. The argument by POTRAZ, the spokeperson says, is that Econet cannot effect a tariff cut of above 50%.

Here’s a quote of the message from POTRAZ:

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“Given the foregoing, we hereby direct Econet to stop the implementation of the advertised tariffs with immediate effect and no further Buddie Zone advertisements should be flighted in any media issue or released after 4PM on Tuesday the 20th of August 2013.”

According to the communication from Econet, they have been told to comply by Friday or face penalties from the telecoms regulator.

We are not sure yet how this affects promos by other operators in the sector, like NetOne and Telecel, who by the way, are the main reason Econet made the move last week to cut off-net tariffs by as much as 60%. We will be finding out.

Reacting to the directive, Econet’s complained that while the regulator is is there to create a level playing field, they had not made any moves to stop other operators in this price war from dropping tariffs. Fingering out Telecel in the response, Econet said “Even when other operators violated key conditions of their license, we did not see any such threats being made. Now when we take steps to deliver affordable services to our own customers, we are barred. This leaves us wondering just how level our playing field really is,”

Econet also said that the 10 cents tariffs had been well received by the public, with usage having risen sharply since the tariff was effected. The company added that the move by POTRAZ would disadvantage millions of Econet customers who were already enjoying the heavily discounted call charges on Econet and to other networks.

Just this morning, we published an opinion on how the mobile tariff wars are killing VoIP providers in the country, who are already charging thin margins to compete reasonably with the incumbent mobile operators.

Update: We managed to get hold of POTRAZ Deputy director general, Alfred Marisa, who spoke to us on the POTRAZ position regarding this development. See the article here.


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63 thoughts on “BREAKING NEWS: POTRAZ orders Econet to revert to 25 cents per minute

  1. This organ called “POTRAZ” i am tempted to believe is only out there to make things as difficult as possible for the man on the street. Everyone knew that once the service providers realised that there was huge competition to get/keep clients, the prices would start dropping, but here they are trying to stop a natural cycle. They were quiet during the period when Telecel was disconnected by Econet

  2. Potraz needs to be disbanded reconstituted. Who benefits from such a directive? Do they want pple to continue being overcharged?

    Is this a way of protecting there cash flows because maybe if prices remain high they can in-turn demand high charges from telcos!

    I can understand if there actions are to protect others from aggressive discounts which might put smaller telcos like netone out of bizness and maybe a total monopoly by one bully telco.

    Having said that, they should strike a balance btwn protective and allowing public to enjoy benefits of competition.

    1. dude, you are funny. this is what you said when econet first advertised these discounted rates and techzim called their bluff:

      “Where is Potraz as a regulator in all this? Its job is to make sure that people clearly understand what is on offer through vetting ads and keep these telcos under leash.

      I wish for that one fine day we will have a proper regulator”

      potraz got involved because clearly there were issues. did these discounts actually benefit the end user? was the discount legal? according to potraz it was not. in actual fact, i would like to see the full potraz statement from potraz directly, as there may be more to this than the econet spokesperson has revealed

      1. Allan, l stand to be corrected where lm wrong.

        Maybe l rushed to comment before we can see the full statement from potraz.

        If they hav done after full investigation and econet was trying to bully the price, then credit to them and they will deserve an apology from me!

    2. the promotion was misleading, they were still charging 23c there was no 10c voice tariff to begin with, they want to take pple for a ride jus like their buddie zone. Good move POTRAZ

      1. although this is not the reason potraz stopped the promotions according to the article

      2. That’s not true, but they did word the non-promotion in a crafty manner: cross network calls were in fact reduced as standard and you had to buy some bundle for the 10c/min intra network calls. The Mobile Networks of Zimbabwe Saga is unfolding pretty fast so if you skip a day or two of Techzim updates you’ll really fall behind!

  3. i thought econet was the regulator when they disconnected Telecel citing that they couldnt do buss with an unlicenced operator, now they are wondering how level the playing field really is , seriously guys you should not be the ones complaining here, now you can feel how it hurts to kick against the pricks

  4. trust me Econet is happy coz they are going to make more money.

    1. Too true. Their complaint probably has more to do with taking advantage of the opportunity to play the victim! hehe

  5. this is welcome, the intensions of Econet were certainly to keep the market skewed and maintain their monopoly position thats y they want to charge lower than the smaller operators to keep them out of business. Econet has significant market power, if they charge lower than the small operators they will acquire the subscribers of ther operators and in the end we will be back to a monopoly. Good move POTRAZ Econet is a bully the move was typical of anti-competitive behaviour to drive others out of the industry even the Competition Commission raised alarm

    1. I cannot agree more. Econet as a dominant company is able to sustain a short period of losses as they undercut other players in anticipation of higher profits when they revert to their higher prices when competition has been thrashed.

      Kudos to POTRAZ. The Econet promotion was not done in good faith

    2. You are right, thats how mergers and acquisitions start, overpowering the smaller ones and then buy them out. with more than 60% market share econet can sustain a break even period if it means destroying their competition. the regulator is there not just for customers but for the other industry players who invested their money VoIP as well

  6. Guys…you have been played a dummy by Econet. The reason why they have been given the directive to cancel promotion is because it was never a promotion i.e. it was misinforming the customers…..thats the only reason they have been stopped. Thanks POTRAZ!

  7. If Portraz gets a % of the revenue made by service providers then it would make some sense why they would rather have high tariffs.

  8. the thing is Potraz is more worried about their percentage they are getting out of the tarrifs so by Econet cutting them down they(Econet) are cutting down what Potraz is getting

    1. a lower tariff will actually generate more revenues from volumes and demand simple economics.

  9. All the legalities and financial semantics aside, Econet was getting too big for its boots. They do display monopolistic and “big fish in a pond” tendencies it is about time POTRAZ does something about Econet. Zvinopawo Telecel, NetOne, Africom, & VOIPs mukanha wekuti vaitewo zvidavado zvavowo!

    1. U are fooling yourself Econet instaled the relevant infrustructure and its now available kusingavanikwe the other two networks plus it is innovative isu tinomhanya neservice provider akarongeka kufonesa vanhu mahara hakuvake base station kkkkkkk. Econet always and the other follow!

  10. Its a jungle out there, Potraz is acting in a confusing way, first, they didn’t disconnect an unlicensed operator, then they are not letting econet to do better, what Telecel has been doing for a while now.

    Whose interests are they serving: their own percentage revenue or the the regulator’s role. My view is that, they ere not doing it to safe guard market structure but simply to protect Netone, since Telecel’s recent actions indicate that they can protect themselves.

  11. The trouble is that you have too much faith in Econet…lets see the full statement from POTRAZ with POTRAZ being the source, Econet is playing selective reporting. I used to love and adore the brand, but not anymore. What we have witnessed are arrogance tendencies because they have become too big. As Microsoft, Nokia what happens if you develop such attitude, and more so APPLE is now feeling the early effects.

    LEST You FORGET – The reason why we all loved Econet is because of the struggle it went through at its inception, we all identified with it given our own struggles. Econet was the victim.. We identified with Strive…!

    Why have you closed the Ecocash to other networks? you are not fixing Telecel but the customer and because of that we shall identify with the victim (Telecel), just as we identified with you when you started…..that is called brand affinity

    ECONET watch the handwriting on the Wall – it will never continue like this…

    VIVA Telecel!!

    1. It is plain and simple, why should Telecel subscribers enjoy Econet’s innovations. Let Telecel provide their own solution that for them to feed off the brains of others. If you want EcoCash, put your Econet SIM in your phone brother. It is that simple. When TeleCash comes or Skwama you can switch. Identify with Telecel if you want and leave econet. Haumanikidzwe

  12. Guys, the truth of the matter is that the playing field remains tilted in the direction of Telecel at this stage. Econet has done a lot to acquire the subscribers and market share over the years. They did not come easy. They borrowed money and “sowed in famine”. It is high time they reap the benefits. Telecel on the other hand now appears like they are innovative when all they are doing is trying to capture Econet subscribers. Our teledensity is not even 100%, why not go for those without phones. Why try to snatch that which belongs to another. POTRAZ on the other hand is an “unfair policeman” who decides to favour some while pushing down others for the same issue. Telecel cuts prices ridiculously and mouth is shut. Econet does the same thing and “they are being unfair”. Indeed, POTRAZ needs a facelift. Change those people lest it becomes another NRZ, ZISCO to name a few organisations with the letter “Z”. It is time the truth is told. Telecel – get real for once. Dindingwe rinonaka richakweva rimwe, kana rokwehwa roti mavara azare ivhu. You are simply out to get more subscribers so that you sell the business when you have increased numbers. You are not out to do business properly. Kwanai apa,

    1. I remember reading an article which stated that if you do innovate, you will die. People do not want the same old thing each and every time. Who still wants a Samsung Galaxy S2? Or the classic iPod? Or the 14 inch tv? People want new exciting stuff. hence the reason why Apple is suffering right now with it’s business model. it grew due to innovation. Now that it has not done much, it’s stock fell to below $500 form an almost $800. Look at WhatsApp, Viber, tablets killing the desktop PC because Microsoft slept on the R&D desk. FNB blew all the other banks to 1845 with it’s products and services. This is the new world order and yes, the in-fashion word to use. innovate. If Econet cannot do it, whose fault is it? And why should the subscriber not benefit from innovation/new products that make life easier and simpler? Some promos are setup to make you spend more whilst trying to get the promo. By the time you realize what you need to do, you have spent a considerable amount of money doing so. Just when you realize that you need to enjoy the discounts, the promo ends. In comes another twisted complicated promo…Never ending cycle of ripping off subscribers and businesses. I applaud Telecel for causing Econet to lower their rates ( that is if they were low in the first place). As long as Telecel does not sabotage the networks, I say bring on the price wars.

  13. Lets get the full POTRAZ statement before we speculate.

    Otherwise something doesnt smell right here coz next thing Telecel will be ordered to STOP their red zone promotions there by talking us consumers back to square one.

    Econet must be very careful coz the outcome of the elections didnt work well for them they might lose their licence.Yes I know they are ZIm cash cow but hasnt Zim killed cash cows before ?

  14. What is POTRAZ safeguarding against? Are we promoting competition which gives birth to efficiency in service delivery at affordable rates? or Are we protecting industry incompetency leading to inefficiencies and unaffordable rates? Who is POTRAZ anyway? Who are they representing the public or certain institutions?

    We left with more questions than answers now.

  15. A true brand offers customers choice not imprison them…here is the thing..I am on econet and I want to send money to my mother on telecel…? Econet has failed to provide value to its client this is pure and simple.

    Image if you go to your bank lets say CBZ and you want to transfer money to supplier who is with Stanbic and you are told we only do internal transfers….that’s utter rubbish and thats not business in the 21st century NO.

  16. I dont understand why POTRAZ would make such a move, who are they protecting ??? I would be happy to see the statement they issued to econet.

    1. True man who are they protecting the consumer or netone and telecel? I will keep my 077xxxxxxxx line chero portraz ikati itai 50 cents per minute handiti ndioyo yakukwidza mitengo? Ndiyanaiko ari ku Potraz kwacho, moda statement yeiko munyika mungova ne ma Kangaroo Courts you think you will get a statement.

  17. POTRAZ yakadhakwa look at what it is doing licencing the same people to run newspapers and radio stations. One TV station munyika mukore uno inotadza kana kuburitsa bhora live from Rufaro stadium. POTRAZ is failing us Zimbabweans, zveshuwa tiri munhamo maZImbo. Shame on you Potraz!!!

    1. usanyadzisire iwe, potraz yakambopa maradio and tv licenses kupi, they r a telecoms regulator not broadcasting

    2. your mix up is actually Correct… BAZ and Potraz should be one body. this is the practice in most countries,

  18. just a month before someone told me telecel’s very low tariffs and promotions where approved by potraz, i then wonder why econet’s tariffs are not being approved too

    1. By the way guys who is this Big Not So Smart Bully who dsnt want to c people enjoying the fruits of competition.He is hitting Econet below the belt.Why.? …

      …….

  19. we want FAIR PLAY POTRAZ, we couldnt talk enough ne 25c and when econet makes it easier, you just blow the whistle pasina foul…aya ndo ma 1

  20. Strive Masiyiwa and Tsitsi Masiyiwa are the sent of God to do this business,any1 goes against econet are fighting God”s idea he invested in his people.

  21. Econet reported and punished Telecel for fouting the Regulations rules. Telecel ammended their anomalys. Now Econet flouts their rules and Potraz punishes them – they cry. Econet wants to play Regulator. No no no – follow the rules guys and get ur promos running. We lovethem coz we win in the end. #TellSomeBUDDIE

  22. There are two possible explanations to this. Potraz earns 2% of all annual revenues raked in by MNOs. So Imagine Econet, the biggest player reducing their charges by 60% in a market where the demand has become inelastic due to whattsapp.. It was ok Telecel and Netone doing it because the impact was insignificant. Secondly, POTRAZ might have received a bashing from invisible hands for the slow reaction to the unfair treatment by Econet of Telecel hence they moved in too quickly this time without thinking that Econet was only responding to competition.

  23. I am smelling rats. Dead rats actually. Is this still business or Potraz has scores to settle on behalf of other entities that shall not be named? First, many people were on Econet’s throat when they blocked Telecel. Econet cited Telecel operating without a licence, a fact that went undisputed up to now, yet Potraz never uttered a word until Telecel re-licensed (with the help of some people who shall not be named – check the media). At this point people (me included) believed Econet could not price competitively so they resorted to bullying. There was even an Econet-bashing programme on Zifm Stereo a day or two after the blocking (because Econet wasn’t represented in that discussion and it was sooo one sided). Now that Econet has realised this is a pricing war, they stepped up and offered the better deal, Potraz objects. They object to lowered prices but they do not object to operating withou a license? somebody help me understand. Are they still a regulator or they have become an arm of some organisationcompany……. Is it still business or there are other non-business related forces that have business interests that are at play here?

  24. What telecel is offering is a bonus, unlike Econet that unilaterally changed
    the tariff with no consultation and permission with the regulator. it stinks, yes but at the end of the day we all have to follow the rules, biggest corporate or not.

  25. First of all find out who are the local owners of telecel, africom and telone, then you will know all the reasons. These are the same reasons why the world is scared bringing business investment to Zimbabwe. Politics. Econet owners are taken as enemies of Zanu pf, hence sabotage.

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