Local mobile telecommunications operators have approached the
Earlier in
According to sources operators have lobbied Potraz since April for tariff increases of between 150 percent and 250 percent but the regulator is still considering the determination citing consumer protection through insulating subscribers who are facing affordability challenges.
According to Telcos firms, high inflation levels are affecting the sustainability of their operations, which is compromising quality of service.
The country's largest mobile telecommunications service provider by subscribers,
"The regulatory tariff increases continue to lag behind inflation and have not yet factored the full impact of the exchange rate depreciation and hyperinflation.
"The company together with the other players in the industry continues to engage with the regulator to implement tariffs that sustain the viability of the sector as well as ensure that a high quality of service standard is maintained.
"Within the quarter, the interbank exchange rate increased 38 percent from
"These distortions have a bearing on the cost of goods and services, including our own. The local cost of providing our services is increasing in line with market trends, where the alternative market is used for reference pricing.
"The regulator has adopted the Telecommunications Pricing Index (TPI) as the tool for setting tariffs while our costs have been increasing in line with the movements in the formal rate of exchange, albeit, with very little availability of foreign currency.
"The frequency and responsiveness to market changes have been low and slow, resulting in our real tariffs being severely undermined. This means that we are not able to pay our vendors for software licences and certain upgrades required to increase our capacity and maintain the quality of service that our customers have come to expect from us."
A source at NetOne who declined to be named said:
"We understand that the regulator wants to protect consumers but for the consumer to get effective service we must be able to operate viably and if you look at the threshold set in March we are giving a megabyte for free in terms of the US dollar.
"We are not prioritised on the foreign currency allocation yet most of our costs are in US dollars."
Chair of the
Potraz is in the process of adopting the Telecommunications Pricing Index (TPI), which observers say can provide a tariff that is effective to sustain sector viability, while ensuring that consumers pay a fair price.
Official data shows that
In regulating tariffs, Potraz is using the cost-based principle, which is the most objective criteria for determining tariffs. As a way of curbing unjustified high data tariffs, Potraz resorted to the TPI to track cost movements in the provision of telecommunication services since
Prior to that, the regulator was using the results of the Long Run Incremental Costing (LRIC) methodology to set thresholds for telecommunication services, including data tariffs.
The use of the TPI was necessitated by the need to facilitate quick decision making in cost-based principle for decisions on tariff adjustments.
The major cost items included in the computation of the TPI include: Network repair and Maintenance costs; Depreciation; Salaries and staff costs; Utilities and Administration costs; Rental costs; Fuel costs; Marketing and Advertising; Research and Development; Financing costs; Capital expenditure costs, and Foreign Exchange losses.
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