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What Will Per-Second Billing Mean for Zimbabwe?Posted by: admin on Wed, 2010-09-08 12:48
Beginning this month, all mobile phone operators are offering per-second billing to customers. The companies are complying with new government rules requiring them to charge customers for the actual time spent on the phone.
By Tawanda Karombo
(Harare, Zimbabwe) – While consumers cheer a new system for mobile phone billing, mobile operators are concerned about the impact on their bottom line. Zimbabwe’s telecommunications regulator, the Posts and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), has enforced the introduction of per-second billing tariffs on the country’s three mobile phone operators.
POTRAZ set the beginning of this month as the deadline for mobile companies to have introduced a new system that charges subscribers for the actual time they spend on the phone. Telecel and Econet have now introduced per-second billing.
NetOne had already rolled out per-second billing on May 1 of this year, but the system was limited to the company’s intra-network calls. In adherence with POTRAZ’s directive, the company has now expanded it to encompass internetwork calls.
A Boon for Consumers
Previously, Zimbabwean mobile subscribers were charged rates averaging the equivalent of US$0.23 per minute. This rate applied even when subscribers spent less than a minute talking on their mobile phones. The average cost per second, according to a statement from Econet is now “US$0.0038 on intra-network calls and US$0.0042 across” all networks.
Many believe the introduction of per-second billing will undoubtedly change the mobile landscape in Zimbabwe for the better, especially for subscribers.
“Consumers will obviously benefit from reduced phone bills,” according to an article by business reporter Kumbirai Makwembere.
Mobile phone users surveyed by AudienceScapes this week said the introduction of per-second billing was long overdue. Aleck Chikomba, a marketing strategist and who uses both Econet and Telecel lines said: “This is what should have been happening and these mobile companies have been short-changing us.” He added that on average, people can “now make 10 calls for a US$1 where they used to make just 4 calls” for the same amount.
Drawbacks of Per-Second Billing
Telecommunications industry experts, on the other hand, told AudienceScapes that the introduction of per-second billing in the country could limit revenue generation for the three telecommunications companies. Zimbabwe’s mobile infrastructure could be affected as the companies would have limited resources to plow back into network expansion and upgrading.
Concerns have also been raised about the new rates resulting in congestion on the mobile networks. Douglas Mboweni, the chief executive officer at Econet, recently told the media: “The cost of making calls will be cheaper, so traffic volumes will increase. We had to first clear issues of capacity before opening up to per-second billing”.
Econet Wireless, Telecel Zimbabwe and NetOne have been running full-page, glossy advertisements in just about all of the country’s newspapers informing subscribers about the move to embrace per-second billing. Unlike the other two mobile companies, Telecel is giving its subscribers the option to stay on the minute-based billing or to use the recently introduced per second billing.
In addition to the new billing regime, other costs associated with using mobile phones have fallen. Prices of mobile SIM cards – which were exorbitantly priced during the hyper-inflationary period of the past decade and which peaked at around US$100 in 2008 – have now come down and cost US$1.
Lower costs are contributing to the rapid expansion of mobile phone usage in Zimbabwe. According to a close analysis of the three mobile companies’ operational and income statements, the number of people using cell phones has increased from about 14 percent of Zimbabwe’s estimated 13 million citizens in 2008 to about 40 percent by March 2010.
Tawanda Karombo is a freelance journalist living in Zimbabwe. He has had experience with Financial, Business and Communication Reporting. He has previously written for The Financial Gazette (Business and Financial Weekly in Zimbabwe), MoneyWeb (South African Investment and Financial web publication) and The Zimbabwe Gazette (Online news publication about Zimbabwe) among others.