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In a move aimed at improving the reliability of telecom services, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) has introduced new regulations that could see telecommunications companies (telcos) fined for failing to meet quality standards. These rules target issues such as dropped calls, slow Internet speeds, and delayed message delivery, holding telcos accountable for maintaining service quality.
According to the updated guidelines, telcos that fail to meet key quality-of-service benchmarks for three consecutive months could face fines of up to $200 per underperforming cell tower. These benchmarks include metrics such as call drop rate, call setup success rate, cell tower availability, and the success rate for data service access. Telcos will also face the same fine for delayed or undelivered text messages.
More significant penalties will be imposed for network outages. Any disruption lasting more than three hours will incur a fine of $5,000, with an additional $5,000 for every extra hour of downtime. Failure to meet interconnection standards could also result in fines of up to $5,000 per instance. Additionally, telecom operators that do not submit required network performance data could be fined up to $5,000 per month.
To ensure quality service, POTRAZ has set stringent targets for telcos. For example, the Data Service Access Success Rate (DSASR) must reach at least 95%, while the Data Service Drop Rate (DSDR) should not exceed 2%.
While these regulations aim to protect consumers, they present a considerable challenge for Zimbabwean telecom operators. Ongoing electricity shortages in the country have forced operators to rely on diesel and other costly alternatives to power cell towers. In addition, major telecom companies, including Econet, NetOne, and Telecel, have reported financial difficulties in recent years.
Econet, Zimbabwe’s largest telecom operator, posted a net loss of $73 million in its annual report for the year ending in February 2024. Similarly, the government-owned NetOne reported losses of at least $200 million over a two-year period by mid-2024. Telecel, another state-owned telecom provider, was placed under corporate rescue in May 2023 to prevent its liquidation.
In response to Zimbabwe’s economic challenges, including hyperinflation, the country’s telcos have urged the government to allow them to peg tariffs in US dollars rather than the local Zimbabwe dollar. This request came despite POTRAZ’s earlier approval of a 50% price increase in March 2023.
As the new regulations take effect, Zimbabwe’s telcos will be under increasing pressure to meet service quality standards while grappling with economic constraints and infrastructural challenges.
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