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Are Econet and NetOne really saying US$7.50 or US$6.54 for 1GB is not economically sustainable?

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I totally understand why it’s frustrating to hear mobile network operators (MNOs) constantly moan that they are charging too little. The sentiment is, ‘you can’t even provide a decent service and yet you want to charge more for it?’ MNOs of course counter with, ‘you are not paying enough to get good service.’

I think both parties are somewhat right. If users felt the service was worth more, they would understand that prices had to go up. Nobody ever appreciates paying more but everyone knows, even when they don’t admit it out loud, when they are getting a ‘too good to be sustainable’ kind of deal.

When MNOs say we are paying too little, most disagree. They recently got the green light to raise prices by 50% and will get to raise prices by another 50% in April. What more do they want?

Well, they want prices pegged in US dollars, not ZW$. For as long as prices are pegged in ZW$, they will never be able to keep up with inflation and exchange rate movements. The regulators take their time to adjust tariff schedules and that’s not ideal in a hyperinflationary environment like ours.

The current tariff thresholds were last adjusted in November 2022. I don’t know about you but if I were charging in ZW$ for anything, I would have adjusted prices many times since November 2022. So, it’s understandable that MNOs would ask that prices be pegged against the USD.

That said, can MNOs really claim they are charging too little?

Ridiculous monthly data bundle prices

Econet’s monthly data bundles cost this much:

  • $10478.76 for 1400MB [that’s about US$10.48 for 1.4GB. My friend, that’s $7.50 for a Gig. If that’s too little, I shudder to think what Econet would have us pay in their perfect world]
  • The Private WiFi bundles are cheaper but not necessarily cheap. You pay $18557 for 8GB [that’s about US$18.50 for 8GB or US$2.30 for a Gig.]

Netone’s monthly data bundles cost this much:

  • $9807.21 for 1.5GB [that’s about US$9.81 for 1.5GB. That’s a ridiculous $6.54 for a Gig. What are these MNOs smoking, this is not cheap, at all.]
  • One-Fi package costs $16850 for 10GB [that’s about US$16.85 for 10GB or US$1.70 for a Gig. That’s more like it]

I don’t know why these MNOs price their monthly data bundles like this. It doesn’t make any sense. You have to spring for the larger data bundles to get reasonable prices per Gig. We expect this to be the case, the larger the data bundle, the lower the price per Gig. However, we don’t expect to see prices per Gig at US$7.50 and US$6.54.

Regional average prices

For context, according to Cable, here’s what the average prices per Gig for mobile data in nearby countries were in 2022:

  • South Africa – $2.04
  • Mozambique – $1.33
  • Zambia – $1.36
  • Malawi – $2.42
  • Kenya – $0.84

According to the same source, the average price for a Gig was $4.26 in Zimbabwe in 2022. I understand that Zimbabwe is a landlocked country and is dealing with some extraordinary challenges. But to say the tariffs currently in place are not economically sustainable is ridiculous.

If Econet cannot be sustainable whilst charging US$7.50 for a gigabyte then they might as well close shop. How much per Gig would be ‘economically sustainable,’ I wonder? The same goes for NetOne and their US$6.54 for a Gig.

Economically sustainable tariff

The MNOs through their representative industry body, the Telecommunications Operators Association of Zimbabwe (TOAZ) are calling for laws that allow them to charge economically sustainable tariffs. We just saw that that’s rubbish.

On pegging prices against the USD, TOAZ says,

This will introduce stability of pricing of our products and bring better transparency in our communication with our customers.

We understand that frequent exchange rate movements make pricing difficult as they claim. We also agree that pegging prices against the USD would bring better transparency.

Just how it would make prices stable is beyond me. If prices are pegged against the USD and it keeps gaining on the ZW$ then that won’t really mean stable prices, quite the opposite really.

We talked about whether we should give these MNOs a pass for the shoddy service they are giving us. We talked about the very real challenges they are facing there. However, that doesn’t mean the current tariff schedules are bad.

Their only problem, granted it’s a huge one, is that when you pay them US$7.50 worth of Zimdollars for a Gig, they can’t readily convert those ZW$ into USD to pay their suppliers, keep up with maintenance schedules, let alone expand their networks.

They cannot hit the black market to get USD, they have to wait to get allocations from the RBZ and they will never get all the forex they need. So, the stacks of ZW$ you gave them will lose value waiting to be converted to USD.

Does this justify charging us $7.50 a Gig to safeguard against that? I don’t think so. But that’s me. Do let us know what you think about all this in the comments section below.

Also read:

Should we give Econet, NetOne and Telecel a pass for shoddy service? Maybe

Why is internet so expensive in Zimbabwe?


Quick NetOne, Econet, And Telecel Airtime Recharge

36 thoughts on “Are Econet and NetOne really saying US$7.50 or US$6.54 for 1GB is not economically sustainable?

  1. I think they just hate Zim dollars (I mean, who wouldnโ€™t) because those prices are ridiculous. Like you said converting to USD is really hard if not impossible and they need that for maintaining equipment.

    The 8GB USD bundle is $13 which is like $1.625 which is in line with the region. Doubt it can get much cheaper. Even if we fix power shortages and maintain infrastructure, Zim is very sparse.

    1. In a jungle full of rats and rabbits, only the lion can sleep soundly and peacefully on open grass whilst the rabbits have their hearts thundering in their holes.

      Someone (s) is being too arrogant and boastful here….we need new competitors

      1. When Chamisa was the minister of telecoms we all enjoyed using mobiles,but the current minister is just a dunderhead who can’t tell his left hand from the right.

      2. We do need new competitors though. Doubt we’ll get them and if we do, we might not see price reductions anyway.

    2. It looks like the $1.70 range is the best we can hope for at the moment. We don’t have to like it, it is what it is.

  2. MNOs and their shareholders are just used to the ridiculous profit margins they used to enjoy during the US dollar era. Instead of acknowledging that data prices should fall, they still view it as a luxury service.

    1. They declared a perpetual war with the consumer from that time, long ago, when they were stopped from charging a minimum of three minutes for any call. Imagine how happy they were when any wrong number called gave them 3 minutes’ revenue for the 15 or 20 seconds one is answered and realises it’s a wrong number! With the sparse network at the time, they also made lots of money from dropped calls. The network was a real modern day technological “chikwambo” no tsikamutanda could excorcise.

      1. That was a wild time. These MNOs actually wanted to resist the move to per second billing. The fact that we even needed a regulator to say ‘stop it’ shows that these guys have no shame.

    2. True that. I guess once you’ve tasted high margins it’s hard to go back. Same with most Zimbos who normalised 100% markups and beyond.
      This has meant, instead of working on cutting overheads, Zimbos think the solution is always higher markups.

    1. Its actually incompetence surcharge. Zimbabwe are paying more because the Zimbabwean MNOs are incompetent.

  3. They are Mafia’s in suits waiting to profit from the struggling masses, Right now you need at least $2us to buy the cheapest browsing USD bundle on the Econet network .

    1. Econet is really hurting us apa. its painful i recently bought a net1 sim for this reason.
      $1.50 to access the internet marwadzo chaiwo..Also surprisingly netone bundles last longer than econet’s,their Whatsapp bundle actually makes calls,the network is awesome, customer service is somewhat better.i feel like i have been missing out a lot.the one thing i miss from econet is yomix

    1. There are 2 options here with respect to econet:
      1. Zero rated, if your site is an educational site or providing social services. You can try and negotiate with Higherlife foundation so that it is Zero rated as part of their philanthropy work.
      2. Reverse billing: You enter into a contract with econet so that visitors to your site are not billed, however you are then billed at the end of the month for traffic offered by your servers

    1. We understand the tough conditions and we have highlighted the operating environment any chance we get. However, they are now blaming everything on that. Even if we allow for the 40% effective tax, Econet still pockets a cool $4.50 per Gig on monthly data bundles.

    2. That still fails to account for the wide discrepancy between Zimbabwean rates to those in Zambia and Mozambique. Even if it was 20%, Zambia and Mozambique would still beat Zimbabwe by a huge margin. So Econet is really sleeping at the wheel taking advantage of the mess at Netone and Telecel.

      1. Exactly. These guys can’t keep pointing to the tax rates or challenging operating conditions when their income after taxes is the highest in the region.

  4. I also understand that we are a landlocked country but perhaps they should bring the bandwidth by air freight instead of road transport so that it doesn’t increase in price in transit. The two issues are definitely related.

    1. Big data spenders are on their knees right now, praying for Starlink to make landfall! I’m right there with them coz even though I can’t afford the price of entry, their service price might open a few influential eyes to the fact that there need to be a paradigm shift in how these local companies are operating.

      1. Same. Don’t have the money but will ‘make a plan’ to get Starlink when (if?) it finally gets here. These local MNOs are taking us for a ride.

    2. Ah Leonard you really are one of the best techzim writers and know how to stir a hornets nest
      Here’s my 2c it really is all about the profits still remember those days when the SIM card cost more than the phone or 50c per min.literally no shame.now when things are tough they want to be cry babies. I would not trust them at all.imagine if we had competition they would cry foul as well.they might actively be vetoing starlink

      1. I had forgotten about the whole SIM card pricing madness. They really were charging hundreds for a line, the greedy lot. Whenever they have had the chance, they have not been ashamed to charge exorbitantly. Econet rides on the ‘govt persecuted us’ excuse even when they are clearly extorting us.
        We have little hope of a fourth MNO being licensed and so to the skies we look.

  5. Haa i foresee our ISPโ€˜s ratting ๐Ÿ€ us out to POTRAZ once Star link comes,because it will obviously be cheaper and faster.same way Foreign phones like iPhones took Local companies like Gtel out of business .Especially Econet will try by all means to make our lives miserable so that we come back to them,they might even make us pay higher taxes monthly for using a (Western Owned Bussiness)๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚

  6. This shows the current government of old horses has failed….we need new blood with new ideas to solve this…not ths chimurenga bla bla bla..

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