Innovation is the answer not steep data floor prices

“WE did nothing wrong, but somehow we lost,” Nokia chief executive Stephen Elop said, in his last speech before the company’s smartphone business division was acquired by Microsoft. Mr Elop was referring to the company’s mistake of being too risk averse in trying to avoid mistakes that could cost the firm market leadership.

Nokia was a leading manufacturer of cell phones, but was pushed out by Samsung and Apple not because it did not charge high prices to protect viability of operations, but because it did not innovate to maintain market relevance. That is a cardinal rule in this era.

Given events that characterised the domestic mobile industry in the last week regarding new data floor prices announced by the Postal and Telecommunications Regulatory Authority of Zimbabwe, at the very least, we expect Econet to know better from the experiences that knocked Nokia off top spot.

While compliance was inevitable, was Econet’s action driven by compelling need to observe the law or by profit motivation? If it is an issue of regulatory compliance, how will the threat from falling revenues, cited by Potraz as the reason for increasing the floor prices, be stymied since the decision to hike floor prices has been reversed, following intervention by the Government?

Change is the only constant in this fast changing global world where a new innovation comes along after every short while.

Technology will surely define our future, if it has not already started dictating the way we live. It would be wrong to suppress benefits of technology for selfish or financial gains yet the mind is a chamber of ideas one can exploit to monetise technology.

The success of a company or rather growth in its revenue should not solely be based on the premium a business charges customers, but also the volume the company will drive by “capturing” a good market share, simply, because its range of products is affordable.

With the increased uptake of smart phones in Zimbabwe, many users are looking for data-centric services; this should naturally positively impact the economy. With mobile phone penetration in Zimbabwe over 97 percent there is opportunity to make good business.

The need for affordable data, instead of voice minutes or SMS messages, should be the reason mobile network operators have to find innovative ways of increasing revenue through driving higher consumption of data.

For many Zimbabweans the use of mobile phone broadband is their primary method of connecting to the internet.

As such, it is a bit absurd, to imagine how steep data prices would drive both data consumption and revenues of mobile phone operators, as Potraz claimed.

If anything, the opposite would have happened; drop in data volumes and tied to it, decrease in revenue from this segment. Puzzling as well was the fact that a sharp increase in data was taken by operators and the regulator as the sole solution to stop falling revenues and protect viability of MNOs.

In another world, the regulator would not connive with operators to set prices consumers would not afford, rather, it sets rules that allow operators to compete fairly, including independently deciding prices, based on competition, quality and affordability.

The heated debate that emanated from the decision by Potraz to hike floor prices, especially of data, seemed to erroneously point fingers to Econet, as a major culprit, which is to be expected given it commands well over 75 percent of the total subscriber base.

Econet, though has denied leading the industry on the issue of proposals to hike floor prices, justifying this by saying it was a collective decision taken in the full knowledge and with the agreement of Government and other operators in the telecoms sector.

Anger and frustrations seemed to boil over, and around Econet. There already is some murmuring in the market that Econent takes advantage of its dominance in the sector, given its size and investment, to levy rates many perceive are, already, too steep.

This analysis of what transpired, does not attempt to fault Econet for being the law abiding citizen that they are or claim to be, after they became the first to implement the new floor prices POTRAZ had directed all operators to adopt; but a question of their sincerity and sympathy when they pledged to engage the regulator after the outcry from the majority of its cus- tomers.

By its own admission, Econet Wireless conceded that its services are bound to be more expensive since “it is the only operator that paid the licence fee of $137,5 million and is owed million of dollars by its Government owned rival operators in interconnection fees.

For its part, Net One immediately sensed the potential backlash or possible negative impact on consumers of the sudden and steep increase in data prices, despite having been part of the meeting that agreed on the framework for the new data and voice call floor prices.

Following the meeting, Potraz set the floor prices for voice calls at 12 cents and that of data at 2 cents/ MB, instantly making data that had previously been available, in instances, at less than 1 cent per MB suddenly very expensive.

Until Government intervened, through ICT, Postal and Courier Services Minister Supa Mandiwanzira, the amount of data that one could buy with a dollar, suddenly required the same individual to fork out a whopping $50.

In this environment and by any standards, this was “crazy” and for whose benefit this was, begs a good answer.

Admittedly, we did not hear too many complaints from customers on the Telecel network, implying the mobile operator was still, either due to their wisdom or lack thereof, considering adopting the new prices; which some cynics may “wrongly” justify as inefficiency.

But what everyone knows without doubt is that Econet Wireless, the largest mobile phone operator were first to adopt the new floor prices that would see their cost of data vault multiple times in a short space of time, even prejudicing consumers who had already bought and been allocated data and planned for specific periods. It was a case of déjà vu no one expected.

The outcry that ensued was, without doubt, first among Econet Wireless clients and later the majority of internet users who would be prized out of this critical service or would have their data consumption constricted.

Ostensibly, resolving viability in an already difficult economic environment, where consumers should derive optimal value from their hard to get dollar, innovation will be a solution, not thoughtless price hikes.