Econet raises bundle prices, says costs outpacing revenues

Econet Wireless Zimbabwe, the country’s largest mobile network operator (MNO) yesterday adjusted its promotional bundle prices by at least 20%.

The adjustment, which does not include the headline tariff, comes after the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz), the industry’s regulator, granted service providers the greenlight to increase promotional bundle prices in line with rising operating costs.

The adjustment does not, however, include the headline (out of bundle) tariffs, which remain the same.

The bundle price adjustment comes after the latest industry report showed a worrying trend where telecommunications companies’ operating costs are growing at a faster pace than revenues.

The Potraz report said MNOs’ operating costs grew by 40,9% to $12,5 billion in the third quarter of 2021, from $8,8 billion reported in the second quarter.

Revenues, however, only grew by 15,8% to $19,5 billion, up from $16,9 billion in the previous quarter.

Econet, whose operations have been hard hit by power cuts and extensive vandalism of its infrastructure, on Monday advised its customers of the impending price adjustments.

“Dear customer. Kindly take note; voice, data and SMS bundle prices will be reviewed effective January 25, 2022,” the company said.

State-owned mobile network service providers Telecel Zimbabwe and NetOne are expected to adjust their bundle prices later in the week or early next week.

Zimbabwean MNOs have been reviewing tariffs regularly, by an average of 20%.

But the tariff adjustments have failed to keep pace with inflation, which closed 2021 at over 60%, while the Zimbabwe dollar lost more than 50% of its value in the past 12 to 18 months.

Industry experts last week said an increase in electricity tariffs early this month, coupled with an unstable foreign currency market, was largely to blame for the rise in prices of most goods and services in several sectors of the economy.

“Electricity and fuel are key fundamental inputs in commerce and industry. They are required in all sectors of the economy. Therefore price increases of these inputs have a pass-on effect in the whole economy, pushing up general inflation as prices of all goods and services go up,” Confederation of Zimbabwe Industries president Kurai Matsheza said.

Power utility Zesa Holdings, which regularly adjusts its electricity prices, increased its tariffs by 12,3% at the beginning of this month, which had an immediate knock-on effect on the prices of basic goods and services.

Meanwhile, Econet said although it was using scarce foreign currency to import and replace infrastructure lost to vandalism, the company would continue seeking ways to keep its more than 10 million subscribers connected.

Zimbabwe’s largest MNO recently introduced United States dollar-denominated promotional bundles to cater for customers who have free funds.

The US$1 bundle consists of 15 voice minutes, 150 megabytes of data and 15 SMS, all valid for 24 hours.-newsday