gtag('config', 'UA-12595121-1'); New mobile data tariffs to trigger inflation – Economist – The Zimbabwe Mail

New mobile data tariffs to trigger inflation – Economist

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MASVINGO-The steep 60% mobile data tariff increases that came into effect this week are going to trigger inflation and the Zim dollar will fall further against major currencies, renowned economic analyst, Professor Gift Mugano has said.

The Postal and Telecommunication Regulatory Authority (POTRAZ) approved price reviews effective November 1 that saw Netone and Econet products going up by an average 60%.

The bundle prices went up both in domestic (ZWL$) and the United States dollars.

State-owned mobile network operator, NetOne used to charge ZWL$525 for 25 minutes but increased the tariffs to ZWL$845 per 25 minutes, while Econet Wireless used to charge ZWL$457 for 20 minutes and now charge ZWL$732.

Scores of people who spoke to The Mirror in interviews described the increases as ridiculous. They said that the increases were taking place at a time when the Zim Dollar is in short supply. They also argued that the increases will fuel inflation since internet and mobile communication has come to be a cog in business.

Professor Mugano said this is likely to cause indexing of prices with goods whereby people will charge goods and services basing on the rate of the dollar.

“This new bundle price is likely to cause price increases because people used to peg airtime or bread at one dollar. So, this is likely to push companies and individuals selling goods or offering services to follow suit.

“As we all know because of COVID-19 people were forced to work from home and data became an essential part of every person. Now raising the price of such an essential service is likely to push inflation up. Electricity and water tariffs are likely to increase in the near future,” said Prof Mugano.

POTRAZ director, Dr Gift Machengete, however, said in a recent report that the capital-intensive telecoms industry requires foreign currency to constantly upgrade network infrastructure.

He also said enhanced growth can be achieved through government intervention and innovative public-private partnerships aimed at improving the digital landscape by assuring access equity and affordability of telecommunication services to all.

“Particular attention needs to be paid to rural areas where broadband coverage of technologies such as LTE is still sparse. Operators also need to innovate and explore sustainable revenue generation and cost containment avenues considering the current economic climate,” said Dr Machengete. – Masvingo Mirror