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POTRAZ Says They Did Not Give ZOL The Go Ahead To Raise Prices

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As you may know, ZOL recently announced that they would be “aligning” prices due to the monetary policy. Though ZOL may call it an alignment, to consumers this is an increase as most salaries have not been “aligned” since the monetary policy was announced.

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The Director-General of POTRAZ Dr Gift Machengete recently commented on the issue saying that they had not given the go-ahead for this switch since they don’t regulate ZOL:

They did not get that from Potraz. In fact, we do not regulate Zol. But we do regulate Liquid and also saw that (increases in tariffs) so we are now going to find out from Liquid what this is all about. I was not in office and I am going to the office right now and will be finding out from Liquid … but we did not give them that permission.

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But right now, because I have not engaged Liquid, it might be premature to comment any further. Maybe after engaging Liquid, which I am going to be doing this afternoon, I can comment further.

ZOL not regulated by POTRAZ?

It may come as a surprise to you that ZOL isn’t regulated by POTRAZ and that is in fact true. POTRAZ does not regulate Internet Service Providers (ISPs). They regulate Internet Access Providers (IAPs), which is why the Director-General insisted that they would be talking to Liquid Telecom. Liquid Telecom is an Access Provider and thus they are regulated by POTRAZ. Because Liquid Telecom owns ZOL, POTRAZ could see this as an attempt by Liquid to make more money without having to apply for a tariffs increase like they would if they approached POTRAZ in their own capacity.

This is an interesting point to emphasise because that could also be a reason why TelOne has maintained pricing throughout the economic turmoil that has been prevailing. TelOne is an IAP and they can’t just change their prices without seeking approval from POTRAZ. TelOne did revise their packages, keeping prices the same but changing the data offerings, which could count as price adjustment but that didn’t really garner the same reaction as the changes appeared reasonable to consumers.

What can POTRAZ do?

ZOL has raised prices three times in less than a year now and all along POTRAZ hadn’t reacted (as far as we know). Whether the dialogue that the Director-General will be having with Liquid Telecoms will have an impact on the pricing is another thing, the question is what can POTRAZ actually do when they don’t regulate ZOL? Yes, Liquid Telecoms owns ZOL but it doesn’t seem as though any of these companies has done something unlawful. Liquid hasn’t raised prices without consulting the regulator but their subsidiary which has done so doesn’t answer to the same regulator.

ZOLGift MachengeteLiquid Telecom

ZOL is one of the biggest internet service providers in Zimbabwe with a growing coverage base which includes most of the country's major cities such as Harare and Bulawayo. The company provides fibre, VSAT and wireless Internet services to a large range of clients from... Read More About ZOL

Gift Kallisto Machengete is a Zimbabwean company executive who is currently the Director General at Postal and Telecommunications Regulatory Authority of Zimbabwe. Dr. Machengete is also the former director of finance and administration in the Central Intelligence Organisation. Read More About Gift Machengete

Liquid Telecom is one of the fastest growing internet service providers in Zimbabwe in particular and Africa in general. It provides state of the art fibre internet which links Zimbabwe and the Southern African region to the outside world. The company is a subsidiary of... Read More About Liquid Telecom


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7 thoughts on “POTRAZ Says They Did Not Give ZOL The Go Ahead To Raise Prices

  1. People really need to update their thinking with regards to the internet in Zimbabwe.

    In a nutshell, local ISP’s go and buy bandwidth from higher tier international providers, they then sell that bandwidth onto us their clients, and they put a mark up on it (to pay for salaries, infrastructure, etc…)

    That being the case, on a fundamental level, their single largest cost is one that needs to be paid in hard currency.

    Now in order to take the conversation further, we have to agree to be honest with each other.

    In hard US$ terms ZOL’s pricing has been pretty stable, but the fact that they’re a huge company, and that the official story was 1:1 for a long time, their hands were tied in as far as them being able to update their pricing to match with the actual exchange rate.

    Now even at 2.5:1 they’re still going to suffer if their clients pay them by way or RTGS.

    Because they’re still having to obtain hard currency at 3.5:1+

    We also have to consider what value proposition we’re being presented with by them. Honestly, its really not bad, especially when compared to what our neighboring countries have available.

    So yes, prices will go up in RTGS terms, definitely. Their may even been some smal movement in US$ terms, depending on how easy or hard it is to buy currency.

    But, really the choice is to live with that, or to not have the service they supply.

    People will site TelOne as some sort of beacon to disprove my points. The fact is, they are 100% government owned, which means they can keep operating even if all they do is turn in loss after loss each year.

          1. and how do those international partners ever get their dividend, if they’re only ever paying for ZOL’s bills? Are you saying that they much just loan ZOL their monthly operation costs for the foreseeable future?

            International accounts pose the same issue. how does one obtain hard currency with which to deposit in those international accounts? is that not the same problem as sourcing forex to pay for the bandwidth in the first place?

    1. Peaking like a ZOL employee…..the rate at which they have increased is not justified…..down with profiteering

  2. No, I’m speaking like someone who runs a business that often depends upon imported, consumables and materials.

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