Econet hikes tariffs by 20pc

Zimbabwe’s largest mobile network operator, Econet Wireless, has revised its voice, data and SMS bundle prices upwards by an average 20 percent, in an effort to recover value reportedly eroded due to currency devaluation and other rising costs of key network inputs.

The mobile operator incurred exchange losses of $10,3 billion in the half-year to August 2020 as a result of the exposure in foreign currency denominated obligations.

“The business continuously reviews its pricing in line with changes in the operating environment to ensure it remains viable, while retaining good quality of service and offering affordable products,” Econet said.

In separate interviews, economic commentators and the Consumer Rights’ Association (CRA) expressed mixed views on the issue of price hikes by MNOs.

An economic commentator Dr Keith Guzah said the environment was challenging for both the telecommunication companies who are struggling to function with low tariffs and consumers who cannot afford the high tariffs charged by the telecoms sector.

“In terms of the economic fundamentals where the US dollar and the Zimbabwe dollar are not at the same level vis a vis the resources that people are earning, this translates to unfairness on the part of the mobile operators.

“We are now caught between a hard rock . . . for them to continue in business there must be that change in terms of increasing the tariffs to also mitigate the spiralling costs,” he said.

“But there is a possibility that one who is supposed to pay for the service does not have the resources. So, there will be a challenge with regards to the number of subscribers.”

The listed telecommunications company earlier said it was transforming itself into a digital service provider, and remained “committed to innovative approaches to deliver these (digital) services and ensure our customers get the best quality voice, data and SMS-based products”.

Econet last adjusted its voice and data tariffs in September, but since that time, the price of many goods and services that constitute critical costs to the business, have sky-rocketed, putting pressure on the company’s bottom line. In particular, the price of electricity has doubled (gone up 100 percent) while diesel has gone up by 32 percent since September. Econet and other telecommunication companies rely on electricity and diesel-generated power to keep their network services up and running.

Although Econet service delivery has been affected by electricity load shedding like many Zimbabwean companies, stemming its revenue generation capacity, the group has, however, devised methods of continuing to provide quality services to its subscribers.

“We maintained quality of service despite the numerous challenges facing businesses in Zimbabwe. In particular, limited foreign currency and disruptions in power supply continue to put a significant strain on our ability to provide uninterrupted excellent service,” said the company Chairman James Myers in a statement accompanying Econet’s half-year results to August 2020.