Data costs more than doubles as operators chase inflation

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Zimbabwe telecommunications company TelOne, has joined the bandwagon of mobile operators and other companies in the country in hiking prices of their goods and services.

The state-owned TelOne has increased its rates by 199.35% with effect from the 6th of November 2019.

Residential packages for data now stand at $176 for the Home Basic package which is 10GB, the lowest priced package and the highest price being $1 401 for their Intense unlimited data package.

The increase in prices of goods and services in Zimbabwe has sparked the rate of inflation to alarming levels, with the latest annual inflation rate being 353% for the month of September 2019, as per ZIMSTAT figures.

Others, like prominent American Economist, Professor Steve Hanke argue that Zimbabwe’s annual inflation has since crossed the 500% mark.

In a contentious move, Finance Minister Professor Mthuli Ncube suspended reporting of annual inflation following the introduction of the Zimbabwean dollar as the sole legal currency effective June 22, 2019.

Mobile operators Econet, Netone and Telecel as well as other telecommunication service providers like ZOL, have been regularly reviewing their data and voice tariffs upwards, making the costs of data excessively expensive for the greater number of customers, whose incomes are further eroded.

With the economy crumbling and heading for a recession in 2019, most companies are regularly revising their prices in order to gain high-profit margins and to ensure that they remain in operation.

The increase in data prices has a negative effect on the country’s internet penetration as people have been adopting Internet use in line with global trends towards digitalised economies.

The Postal and Telecommunications Regulatory Authority (POTRAZ) stated that as of 31 December 2018, 8.7 million Zimbabweans had internet access.

However, data price increases are likely to lead to some people abandoning Internet usage and turning to alternatives such as SMS which some regard as cheaper.

Apart from the high inflation rate, price increases by telecommunications companies have also been attributed to power outages which have made it necessary for them to use generators when facing power cuts in order to provide services to their customers and these require money for fuel purchases.

Infrastructure and bandwidth purchases that require foreign currency which is scarce in the country have also been stated by some companies as their other reason for hiking prices as they intend to generate enough Zimbabwean dollars to be able to get the foreign currency they need.

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