Data is one of the most essential commodities in the modern world. However, not everyone can afford to access data at a reasonable cost, especially in developing countries like Zimbabwe. Zimbabwe has one of the highest data prices in Africa and the world, according to various reports and surveys. According to a 2020 report by Cable.co.uk, Zimbabwe ranked 224th out of 228 countries in terms of mobile data affordability, with an average more than 100 times higher than India, which had the cheapest data at $0.09 per 1GB.
So what are the reasons behind this exorbitant pricing? There are several factors that contribute to this situation, such as:
Economic instability
Zimbabwe has been facing a severe economic crisis for years, characterized by hyperinflation, currency devaluation, foreign exchange shortages, and low productivity. This has affected the ability of mobile network operators (MNOs) to import equipment and services, pay license fees and taxes, and maintain their infrastructure. As a result, MNOs have to pass on these costs to consumers by increasing their tariffs.
Regulatory environment:
The government of Zimbabwe regulates the telecommunications sector through various bodies, such as the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), the Reserve Bank of Zimbabwe (RBZ), and the Ministry of Information Communication Technology and Courier Services. These bodies set the rules and policies that MNOs have to comply with, such as tariff approvals, licensing requirements, spectrum allocation, quality of service standards, and taxation. However, some of these rules and policies are not conducive to fostering competition and innovation in the sector, and may instead create barriers and inefficiencies that affect service delivery and pricing.
Market structure:
The mobile data market in Zimbabwe is dominated by three MNOs: Econet Wireless, NetOne, and Telecel. Econet has the largest market share, with about 70% of active subscribers, followed by NetOne with 23% and Telecel with 7%, according to POTRAZ statistics for the third quarter of 2020. This means that Econet has a significant influence on the pricing and quality of data services in the country, and may not face enough competitive pressure from its rivals to lower its prices or improve its services.
Consumer behavior:
The demand for data in Zimbabwe is high, as many people use it for various purposes, such as social media, messaging, video streaming, online gaming, e-learning, e-commerce, and e-government. However, many consumers are not aware of or do not use alternative or cheaper ways of accessing data, such as Wi-Fi hotspots, public access points, or data bundles. Instead, they rely on out-of-bundle data or pay-as-you-go data, which are more expensive and less efficient.
Some initiatives and interventions that are being undertaken or proposed to address this challenge, such as:
Infrastructure sharing:
This is a policy that requires MNOs to share their infrastructure, such as base stations, towers, fiber optic cables, and backhaul links, with each other or with other service providers. This can help reduce duplication and wastage of resources, lower operational costs, improve network coverage and quality, and ultimately lower data prices.
Universal service fund:
This is a fund that is financed by contributions from MNOs and other telecommunication service providers based on their annual gross turnover. The fund is used to subsidize the provision of telecommunication services in underserved or unserved areas of the country. This can help increase access and affordability of data for rural and marginalized communities.
Consumer education:
This is a process that involves raising awareness and providing information to consumers about their rights and responsibilities regarding data services. This can help consumers make informed choices about their data usage and expenditure, compare different service providers and plans, and seek redress for poor service or unfair billing practices.
Data is expensive in Zimbabwe because of various economic, regulatory, and market-related factors that affect both supply-side (MNOs) and demand-side (consumers) dynamics. However, there are also some potential solutions that can help improve the situation by reducing costs, increasing competition, and enhancing consumerlfare
