New Econet data bundle tariffs competitive compared to regional tariffs

DEBATE has been raging in the last couple of days after mobile network operator Econet Wireless Zimbabwe announced an upward tariff adjustment for its data bundles.

At the centre of debate was the monthly 25GB wifi data bundle after its tariff went up by 225 percent.

The data bundle was used as a benchmark and point of discussion, although the average increase for Econet’s 47 or so data bundles was just 38 percent. When you take the 225 percent increase of the 25GB bundle into account, the average adjustment becomes 43 percent.

However, the 25GB Wifi bundle was used as a reference point by some commentators, yet the bundle is used by less than 0,1 percent of Econet subscribers, according to the company. The recent industry figures suggest Econet has over 5,5 million active data users.

But the real story is that the more popular bundles, such as WhatsApp, Facebook, Instagram, Twitter and Daily and Weekly bundles only went up by an average 24 percent, which makes the latest adjustment (in Zimbabwe dollars) quite reasonable, considering the country’s annual inflation rate for March of 676 percent.

The month on month inflation rate for March stood at 26,59 percent. The figures for April are not yet out – but are likely to have been higher.

More significantly, if we are to use the 25GB Wifi bundle as a basis for comparison with data bundles offered in other countries, the story becomes very different, with Econet data bundle prices – even the most highly priced – comparing favourably.

Below is a comparison:

Regional Large Data Bundle Comparison

Source: https://www.mtn.co.za/Pages/Reduced-bundles.aspx

https://www.vodacom.co.za/vodacom/shopping/data/prepaid-data

https://www.safaricom.co.ke/faqs/faq/389

From the above, it is clear Econet’s data pricing for the contentious 25GB bundle is very competitive.

Further to that, even if one considers the 1GB data bundle, in South Africa, MTN and Vodacom charge R99 for a monthly 1GB bundle, while Econet charges $340 or R125 for its monthly bundle, with is bigger – a 1.4GB bundle.

There is of course no doubt that the Zimbabwean consumer is constrained to meet some of the data costs, but the viability of the telco businesses, in an environment so short of critical forex for them to retool, also has to be taken into consideration.

The cost of doing business in Zimbabwe has remained elevated for much longer than in other markets, threatening the viability of local MNOs and businesses in other sectors.

MNOs also now have to generate enough revenues to allow them to continue making payments to foreign suppliers and creditors. This has been made difficult by the falling exchange rate.

The latest data bundle tariff adjustments by Econet, and those to be announced NetOne on Wednesday, are within the threshold of what the regulator Potraz already approved.