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 Herald (Zimbabwe) - - Review - Christo­pher Farai Charamba Re­view Cor­re­spon­dent Feed­back: christo­pher.charamba@zim­pa­pers.co.zw.

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

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