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Econet is calling for a tariff increase

Econet Wireless ZImbabwe, tariff, tariffs increase

The country’s biggest mobile network operator (MNO) Econet Wireless has called for a tariff increase. The company cited that this will be the only way to keep the telecoms industry viable as the sector is very resource-intensive and relies heavily on foreign currency which is in short supply.

“Our headline tariffs were last reviewed in August 2020. Given the inflationary pressures experienced, we believe that another tariff review is due in order for the sector to remain viable. All our pricing is determined by the regulator using given cost inputs. The timely adjustment of tariffs, using the Telecommunications Pricing Index, is critical to our continued viability as a business.”

 James Myers , Econet Chairman via New Zimbabwe

If you remember, around this time last year, Econet, NetOne and Telecel were given the green light by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) to steadily increase prices.

At the time of this announcement, we speculated that there was a hard cap that was put tariff increases on all the MNOs. And it looks like, with the most recent 20% Econet price adjustment, that ceiling has been reached. In the meantime, the inflationary environment hasn’t helped and one area that Econet has bemoaned about for the longest time is its reliance on the inconsistent nation power supply.

“We make use of diesel-powered generators to supplement what we draw from the national grid. As a result, we continue to see an increase in our carbon footprint as well as the cost of doing business. We continue working to enhance our green footprint and  reduce carbon emissions by increasing the number of solar-powered base station sites.”

 James Myers , Econet Wireless Zimbabwe Chairman

James Myers also noted that revenue has increased due to the demand for data as well as:

  • Improving operational efficiencies and continued cost containment measures yielded positive results which saw the earnings before interest, taxation, depreciation and amortization (EBITDA) margin increase to 52%.
  • Net exchange losses decreased by 46% to close the year at ZW$ 13.7 billion
  • Capital expenditure investment remains subdued due to the scarcity of foreign currency.
  • Econet’s earnings per share increased from a loss of 237 cents per share to positive earnings per share of 35 cents. Cash flow remains positive and we continue to manage cash position prudently in light of the challenging operating environment.
  • The balance sheet is bolstered by Econet’s investment of about 7% of Liquid Telecommunications Jersey (LTJ), which is now valued at US$ 145 million.

With all of that out of the way

We need to spare a thought for the customer. Econet might need to increase its tariffs but the price of data, at a time where internet services are vital, continues to leave many behind. This is one of the many reasons why we say WhatsApp is the internet in Zimbabwe because that’s all many can afford.

Now, it’s easy to levy blame at Econet but I think this is something that the Ministry of ICTs and Ministry of Finance could possibly address. By this, I mean finding a way to lessen the burden on MNOs in taxes and other obligations so that the benefits can trickle down to the customer.

Internet services should be classified as an essential service and ways to make accessing the World Wide Web more affordable should be prioritised.

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31 thoughts on “Econet is calling for a tariff increase

  1. I think the amount they spend on fuel on boosters in a month could be equivalent if not more than the cost of installing a solar panel and batteries or are they afraid the panels and batteries will be stolen.

    1. I am looking to change services. Their service is just getting worse every time they put the charges up.

  2. Econet is becoming completely stupid. How can they keep doing this to us. This is exactly why some people resort to using VPNs for free internet. What operations are thry talking about? Bloody fools, they are gonna lose customers very soon. Busy monopolising on Ecocash. Things are going to change sooner than they think, new companies are going to be created….. BASTARDS

  3. Day light robbery, during usd era 1 gig daily bundle was $2, now cost 700. using official rate thats $8usd, using black market rate thats about 5usd

    1. You can say that again. I also noticed that we could buy 1gig data for a dollar , now it’s already unaffordable due to pricing

  4. The real question is how has Econet been doing it all this time. Consider that they’re 1GB is going for $8 (using the “official” exchange rate). A few years back 1GB was going for $1.50-$2.00. The situation hasn’t really changed. The USD hasn’t been hit by any form of recognizable inflation. It has remained quite solid for a number of years. So is Econet telling us that now it “mysteriously” expensive to make us access data. I mean c’mon for chrissake we are in the digital era, data shouldn’t be expensive- at all. The time it was going for $2 per gig, that’s the time it should’ve had expensive data since we were not all digitized. I think it’s basically using the grounds that, they are few MNO’s in the country, so even if it “hiked” tariffs up, the shift of people moving from one MNO to another is slim. Like from Telecel, Netone, to Econet again. So it’s just a cycle

  5. The real question is how has Econet been doing it all this time. Consider that they’re 1GB is going for $8 (using the “official” exchange rate). A few years back 1GB was going for $1.50-$2.00. The situation hasn’t really changed. The USD hasn’t been hit by any form of recognizable inflation. It has remained quite solid for a number of years. So is Econet telling us that now it “mysteriously” expensive to make us access data. I mean c’mon for chrissake we are in the digital era, data shouldn’t be expensive- at all. The time it was going for $2 per gig, that’s the time it should’ve had expensive data since we were not all digitized. I think it’s basically using the grounds that, they are few MNO’s in the country, so even if it “hiked” tariffs up, the shift of people moving from one MNO to another is slim. Like from Telecel, Netone, to Econet again. So it’s just a cycle

  6. I blame the government too, can’t it find ways to at least decrease tax on local MNOs, since it’s an indigenouzation drive. ( i took 2 mins trying to type that word, and it’s still wrong ಥ_ಥ)

    1. Lol starting a company isn’t the difficult part. Forbidding economic environment, those tax & other obligations restrictions will hinder operations. I concur, those stated ministries & additionally others such as the Ministry of Education should lobby the government to lessen the burden on the MNOs. In turn data would be accessible to most students, entrepreneurs down to the herd boys in the fringes.

  7. My philosophy, given the general global trend towards being too reliable on the www, is and has been, to have the most critical data resources on fixed media where I have direct access despite the minor inconveniences. Old fashioned, and proud of it. Source code, utilities, music, games, movies, pics etc loads of CDs, a couple of Hard drives, DVDs, flash drives etc even vinyl LPs and music cassettes. When I need ’em, I got ’em!! … not thru some 3P oligarchy. I might start a museum some day!!

  8. Telecom companies the world over are not relying on internet as their main source of profit. As long as Econet tries to profit from internet, they will always be in a crisis. They should shift their attention to Value Added Service, these will not require foreign currency.

  9. Is the gvt involved in blocking out pple from affordable internet if so its a sinister approach of governance why wld Potraz and MNOs make it so expensive for internet access in Zim

  10. Internet in South Africa costs less than USD 100 for 1 Gbps, I dare not ask how much it will cost in Zim. I would estimate about USD 100 000 a month. In other parts of the world 1Gbps of internet costs 40 USD. In terms of infrastructure, Elon Musk is using jet fuel to send rockets into space. And place satellites in orbit but still able to deliver 500Mbps at 100 USD. Now tell me, which CAPEX is more expensive, maintaining a stationary base station or a fully autonomous space satellite with A. I to dodge space debris and still provide internet services. I am sorry, but I don’t buy the whole infrastructure too expensive thing. Also, WhatsApp bundles are killing innovation and technology advancement. What this means is that our internet is boxed into a single platform called WhatsApp. Education, agriculture, all technology has to revolve around WhatsApp. As vast as the internet is, as rich as it is with a wealth of information, we should allow people to have the freedom of using the whole internet at an affordable price.

  11. Even if there where funds from other countries it was going to be the same data prices (UP every week) ,
    they should just say $1000 for 1MB & you will manage to download movies maybe
    e VOD too.LOL

    1. Honestly when this whole thing started I thought it was unorthodox but now it’s really starting to make sense. On that note, ndipowo apk nemaSettings 😁

      1. This whole situation is a joke nothing is wrong with Zimbabwe.its like fighting Satan, but GOD created Satan so who are we fighting? i’m confused .LOL

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