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.