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Tariff change puts the squeeze on Zim's mobile operators

Tariff change puts the squeeze on Zim's mobile operators.

The Zimbabwean telecommunications industry regulator has explained the marginal 1 cent increase in mobile voice tariffs for local operators Econet Wireless, NetOne and Telecel, saying the raise was in line with new costing models adopted for the industry.

Following the tariff announcement, Econet initiated legal action against the regulator and is claiming $132 million in lost revenue as a result of the regulator's decision, adding that it has paid in full for its licence renewal.

ITWeb Africa has also been informed that companies were seeking a much higher tariff increase to cover declining revenues in the industry. However, Potraz has argued that it also takes into account increases in operating costs.

"The revised implementation takes into account the 5 percent excise duty that was introduced on telecommunication services, the increase in Universal Service Fund levy from 0.5 percent to 1.5 percent as well as the reduction in the national interconnection rate from $0.05 to $0.04," the regulator stated.

Zimbabwean mobile operators now charge 16 cents per minute for voice calls, a marginal increase from the 15 cents per minute they were charging last year. In 2015, Potraz enforced a 30% tariff reduction and had said it would further lower tariffs.

The Southern African country's economy is struggling, with company profits nose-diving. The country has looked to the telecommunications sector - however, revenues in this sector have also started to decline amid intense competition with the advent of alternative and cheaper communications platforms and applications.

Mobile operators saw revenues decline by 2.9% in the second quarter 2015 to $183 million. Some are investing heavily into data capacity and capability to diversify revenue streams, while mobile money has also been another area of focus.

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