It’s been a hailstorm on social media following the recent upward adjustments of data and social media bundles by the mobile networks firstly by Telecel on the 19th of December and Econet on the 11th of January. NetOne is sure to make its own adjustments.
The question is who is to blame for this mess?
The tariff changes have been the result of floor pricing. Floor pricing or price floor is when a body, usually a regulatory or government-affiliated arm, imposes a price control that is based on how low an industry can charge for a service or product.
The reasons for implementing such a policy vary due to market circumstances. In certain instances, price floors can be implemented to reduce uncompetitive behaviours or protect the long-term health of an industry during a price war.
In our current situation, the data and voice price floor could have been implemented for a number of reasons but it is not likely that they have been imposed because of uncompetitive behaviour or because there is a price war.
It seems the decision to implement this price floor is to protect the revenues of the industry from plummeting and to also insure the downstream tax revenues remain healthy in an environment characterised by cash challenges dwindling incomes in a less than stellar economy.
The general public has been justifiably up in arms and many theories have been proposed to explain the decision. POTRAZ and the government have been accused along with the mobile networks of being in cahoots in bringing the price of data up.
The reality is that mobile networks operators (MNOs), as commercial oriented enterprises will, because of their profit chasing genetic make-up, take advantage of any opportunity to make money.
The price floor is one such opportunity as revenues will jump due to the unavoidable higher tariffs. The bulk of the public’s wrath must be directed at the regulator whose mandate at law is to regulate tariffs of the industry and protect consumers.
Having said that, it is still possible while implementing the pricing floor for the mobile operators to exercise some humanity and ethics towards subscribers and not take advantage of the pricing floor to charge exorbitantly.
Ultimately it is in the consumer’s interests to punish or reward players who overcharge or give a good price. The consumer notwithstanding the challenging circumstances still has a voice and should reward networks that will stand by them in this trying period by voting with their feet while they file complaints with the industry’s regulatory body.
While operators are more visible and naturally on the receiving end of the public anger, the reality is that the blame must be placed squarely in the regulator’s lap.
The industry players would have been consulted through their telecommunications body and would have naturally made submissions but ultimately the buck stops with the regulatory authority who has the legal muscle to right this self-inflicted crisis.
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