Floor prices a barrier to internet usage
In June 2016, the United Nations Human Rights Council passed a non-binding resolution that recognised the right to internet access as a human right for all.
THE resolution titled “The Promotion, Protection and Enjoyment of Human Rights on the internet”, “calls upon all States to consider formulating, through transparent and inclusive processes with all stakeholders, and adopting national internet-related public policies that have the objective of universal access and enjoyment of human rights at their core”.
It also recognised “the global and open nature of the internet as a driving force in accelerating progress towards development in its various forms, including in achieving the Sustainable Development Goals” and affirmed “the importance of applying a comprehensive human rights-based approach in providing and in expanding access to internet and requests all states to make efforts to bridge the many forms of digital divides”.
Zimbabwe seems to be going in an opposite direction to this resolution.
Rather than adopting policies that encourage the universal access to the internet, policies being implemented are pricing ordinary individuals out of accessing Internet services.
On January 9, 2017, The Regulatory Determination on Floor Prices for Voice and Data for Bundled Service Packages Including Promotions issued by the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) came into effect.
These floor prices were set at 12 cents per minute for voice services and 2 cents per megabyte for data services.
Responding to these new tariffs imposed by the regulatory authority, Econet Wireless became the first mobile network operator (MNO) to revise its tariffs on Wednesday.
Econet’s new tariffs saw data go from $1 for 250MB to $1 for a 10MB with a bonus of 10MB on Wi-Fi. 1,5GB of data, with an equal provision for Wi-Fi now costs $50, previously one could get 2GB of data for $3.
Econet has also added a premium for over the top services such as WhatsApp calls, removing access to the service and Facebook calls from their social media bundles.
This, however, goes against the principle of Network Neutrality which according to Open Internet “is the idea that your cellular, cable, or phone internet connection should treat all websites and services the same.”
This means that MNO, ISPs and regulators should treat all data the same and not discriminate against users or content and charge differentially for any of the information accessed online.
The new tariffs that Econet has set are in some instances five times the recommended floor price and have left consumers outraged as they see this as a means of pricing out of the Internet.
In an open letter to Potraz shared on social media, a concerned user of the Internet also known as a “netizen” wrote, “In as much as we appreciate your steering prices amongst the local MNOs, we are not pleased with this latest move. Data prices in Zimbabwe have become just too high, case in point being Econet Zimbabwe’s recent data hikes.
“We would at least appreciate that instead of protecting MNOs, you also consider protecting us as well. I still don’t understand the idea of setting a price floor instead of a price ceiling, because clearly that has not helped us.
“We have a lot of start-ups leveraging data services just to get their services and products across. How do you expect these guys to move forward when they spend the rest of their income on purchasing data?”
ICT consultant and Digital Society of Zimbabwe Coordinator Mr Chris Musodza concurred that the new floor prices were a barrier to Internet usage.
“We are very concerned about the new tariffs that have been imposed,” he said. “The data shows that there are 6,7 million people in Zimbabwe who connect to the Internet and of those 6,7 million, 98 percent access the Internet on their phones.
“Facebook and WhatsApp are the leading drivers of Internet usage in the country. Before, it was affordable for people to connect to these platforms, but now with these floor prices, a huge chunk of the six million people won’t be able to connect.”
Mr Musodza bemoaned the fact that the new data prices that Econet set would not allow people to do basic functions that they had become accustomed to online.
“Before, $1 could get you 250MB from Econet, now that same dollar gets you 10MB,” he said. “With 10MB, if someone sends you an audio clip and you download it, half your data is gone instantly.
“The average application that one downloads is about 50MB in size. Right now 50MB is $3. Imagine how much one would need to download other applications. WhatsApp, for example, is 100MB in size for which one would need $5 to download.
“These new prices are going to affect the ordinary person and internet usage is going to go down. We are going to have less people accessing new media and other digital platforms and this is a terrible situation for Zimbabweans. Essentially, what these new tariffs are doing is making the Internet elitist, which is not what is supposed to be happening.”
According to Mr Musodza, Potraz has taken the wrong approach with the new floor prices if their intention is for MNOs to make more money.
“I do not understand the thought making process behind these tariffs,” he said. “If Potraz wants the mobile network operators to make more money, then they should reduce their licence fees. Zimbabwe is a small market and the licence fees that the regulator charges are too high.
“Increasing data costs and putting the burden on the consumer is not the solution to the problem. What’s worse is charging a premium for over the top services like WhatsApp calling. That is not the way to go. WhatsApp calling already uses data, so why charge extra for it?
“This is a problem that is affecting telecoms companies world over and they should actually innovate rather than try to fleece off the consumer. A price ceiling would have been better than a floor price because that would protect the consumer.”
Responding to questions on its website, Potraz argued that it “has a mandate . . . to ensure sustainable and consistent provision of domestic and international telecommunication services. Therefore, the introduction of floor prices will ensure consistent and sustainable long-term provision of services to all Zimbabweans.”
“Floor pricing,” it said, “does not only focus on revenue, but on sustaining long-term provision of service to consumers throughout the country.”
In an article carried by Chronicle, Potraz director general Dr Gift Machengete said “in the case of the floor prices, consultations were carried out with operators and did not involve subscribers.
“This was on account of the fact that the scope of the consultations mainly focused on the cost of service provision, which in our view did not warrant the involvement of sub- scribers.”
Dr Machengete added that mobile operators “had actually proposed floor prices ranging between $0,01 and $0,05 per megabyte. The floor price of $0,02 per megabyte was extrapolated using the 2014 Bottom-Up cost model results by factoring in the significant growth in data usage since 2013”.
Asked why the regulator would impose a tariff increase in a country that is already deemed costly in terms of data charges, Dr Machengete said Zimbabwe, being a landlocked country, had no cable landing stations, hence the high costs.
This, he said, meant that the country would have to access submarine cables through third party countries, which makes access to international bandwidth much more expensive.
Data charges in Zimbabwe are some of the most expensive in the region.
For 1GB of data, Zimbabweans are paying between $30 and $35, depending on the network, in Namibia it would cost an equivalent of $2,23 and in South Africa $4,38 for the cheapest and $5,86 for the most expensive.
In Malawi, a gigabyte of data will set you back $2,69 and in Zambia $10 equivalent.
In Angola, considered one of the most expensive countries to live in Africa, 1GB costs an equivalent of $22,62 and with the same $30 that one pays for 1GB of data in Zimbabwe, one can get 12GB in Kenya.
Zimbabweans are, therefore, paying up to 10 times what their regional counterparts are paying for data.
These new tariffs go against universal access to the Internet and are likely to hinder Zimbabweans accessibility to online services which other branches of the Government have been encouraging.
The Ministry of Primary and Secondary Education recently launched its eMAP online enrolment system for Form 1 learners. These new tariffs are likely to make it more difficult for parents to access the platform to register their children.
Also affected are those who use mobile internet banking services as it will be too expensive to connect online and cheaper to go into the banking hall.
This goes against the alternative banking services that the Ministry of Finance and the Reserve Bank of Zimbabwe have been advocating for.
Responding to complaints by customers, Econet chief executive Douglas Mboweni said the company recognised that the new floor prices had not only inconvenienced customers, but caused them pain.
“We have listened to the feedback that you have shared with us in respect to this action (new tariffs),” he said. “We assure you that we take this feedback with the seriousness that it deserves and we are engaging the regulator on this matter.”
NetOne acting chief executive officer, Mr Brian Mutandiro, confirmed that they were yet to effect the new tariffs as they were also engaging Potraz on the matter.
“I cannot disclose any position (on the tariffs) as we are currently in consultation with the regulator with a view of adopting the determination,” he said.
In October 2015, the Nigerian Communications Commission did away with their data floor price limit and gave MNOs and Internet service providers (ISPs) freedom to drop their data prices as low as they could go.
This instantly gave consumers more data for their money and according to Techpoint Nigeria, attracted more customers to Internet services, increasing revenue earned through mobile data.
Last year in South Africa, the #DataMustFall campaign saw radio personality Tbo Touch make a presentation to Parliament advocating for data prices to be reduced.
The campaign received some successes as MNOs such as MTN reduced the cost of data on their network.
According to Potraz, one of its aims “is to keep the price of data as low as possible, while ensuring sustainability of the sector and protection of consumers.
The authority’s intention in setting floor prices is, therefore, “to maintain a delicate balance between service affordability by consumers and operator viability”.
What is evident is that the new floor prices are unaffordable for the consumer and as such the regulator will likely have to revise its position if it is to protect the customer.
Infographic by Daniel Mandishona
The new policy will affect OTT services such as WhatsApp calls