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BizDay Zimbabwe

Econet defiant

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MOBILE phone operator Econet Wireless remains defiant insisting the Postal and Telecommunications Regulatory Authority of Zimbabwe is wrong in directing the company to reverse its decision to cut the tariff for all voice calls by 60 percent.Econet Wireless chief executive Mr Douglas Mboweni in an interview said as a regulatory authority Potraz overstepped its mandate by delving into the firm’s operational issues.

“The issue that all of us as the operators, the regulators and the policy makers have to take into consideration is the fact that there is the regulatory space that regulators focus on, but there is the operational space, operators focus on,” he said.

“I think it would be dangerous for the regulator or the policy maker to overshoot the regulatory boundary or policy making boundary and enter the operational area, because the operational arena is specifically for the operators,” Mr Mboweni said.

He said that the primary role of policy makers and regulators was to create a level playing field by establishing the rules of the “game”, but not to participate in the game.

Mr Mboweni said Potraz’s directive could be the result of a misunderstanding between the regulator, policy maker and Econet Wireless, which should be clarified. While he would not say whether Econet will comply with the Potraz directive to revert to the old tariff by tomorrow as directed by Potraz he said the Buddie Zone would continue.

He said Buddie Zone was not a promotion and was also not bound by time limits, as a permanent feature of Econet’s tariffing system commonly known as dynamic tariffing.

Considering Potraz assertions and Econet’s defiance, the stage appears set for a bruising showdown. However, Econet said the parties would discuss the issues.

The Econet boss insisted that it made little business sense to maintain regulated tariff structures yet the business cycle points to the need to incentivise customers.

“As an operator, I am allowed to be flexible depending on the traffic patterns on my system because, then, it results in the efficient utilisation of the system,” he said.

On Tuesday, Potraz directed Econet to revert to the US25 cents per minute tariff after the mobile phone operator had on Thursday slashed the tariff rate to US10c per minute.

In an interview, Potraz acting director-general Mr Alfred Marisa said Econet should have sought approval from the regulator to reduce the tariff prior to reducing the charges.

“The bottom line is that any tariff increase or decrease has to be approved by Potraz. This is enshrined in the Postal and Telecommunications Act. Section 100 of the Act mandates us as the authority to regulate changes in the tariffs,” Mr Marisa said.

He said tariff cuts should first get regulatory approval after consideration by Potraz and this should be supported by factors such as changes in the cost structure.

According to Potraz, promotions should not be anti-competitive, not misleading to the consumer while tariff reductions should be reasonable. He said promotions have time limits. The effect of a promotion or tariff reduction to industry is also considered.

Mr Marisa added that Econet’s Buddie Zone, which results in changes in tariff levels, was only approved as a request for trial run that was supposed to last for three months. After this, he said, Econet should have sought an extension to the period.

Mr Marisa said where an operator advertises or implements an unapproved tariff, Potraz was duty bound to stop the operator from doing so and then penalise them.

But Mr Mboweni earlier said that Econet had been running Buddie Zone tariffing for a long time and professed ignorance that the “promotion” period had long expired.

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