A colleague of mine and fellow journalist Hopewell Chin’ono recently advertised his three-bedroomed house for sale, going to the tune usd $550 000 however, he was bombarded with negative comments and insults claiming that his house was too expensive compared with higher values properties in South Africa
One of the comments read
“One day we need to talk about how property in Zimbabwe is overpriced. A 3-bedroom house for almost R10 Million? Crazy,,, at most this could go for R3 million in Fourways, Bryanston etc!”
In his response, Daddy Hopewell as he is affectionately known responded saying;
How do you price a house in Zimbabwe using South African prices when we are not in South Africa?
The variables are different, South Africa has a huge house expansion drive.
In Zimbabwe we are still living in Ian Smith’s suburbs.
The analogy of this conversation has led me to think about the data issues in Zimbabwe, the actual landing cost of the product to the consumer compared to other regional players in SADC
The cost of landing data in a landlocked country like Zimbabwe can never be expected to be the same, compared with countries that are already linked to various seas and oceans.
All our internet traffic connects through submarine cables oceans and seas, passing via other countries, and there is a cost to connect to any water-based source.
TelOne was recently facing international disconnection threats of over US $22 million, and received demand letters from the following service providers; TDM of Mozambique — $5,7 million for backhaul services, Telecom Capital Finance — $1,1 million for loan repayment, Duraline — $845 000 for network material, WIOCC — $6,2 million for internet bandwidth
Among the 54 African countries recognized by the United Nations, 38 countries have seashores and 16 are landlocked, Zimbabwe is among these 16.
Out of these 38 countries that have seashores, 37 countries have at least one submarine cable landing. The lone exception is Eritrea, considering Western Sahara is considered a disputed territory
There are now eight international subsea cables landing in South Africa, including WACS, SAT-3/WASC, SAFE, SEACOM, EASSy, METISS, Equiano and two Africa. And six submarine cables landing in Kenya, including:
Telkom Kenya owns a 23 percent stake in TEAMS, a 10 percent stake in LION2 and a 2.6 percent stake in EASSy.
This is a serious capital investment to enable communication, which comes at a cost and must be recouped via a profitable model that every business model must then pursue.
Millions of dollars have been invested, and while these companies are fixing the telecommunication problem, they are also for-profit enterprises.
Besides the costs and return on investment, internet access Providers are required to pay huge sums of operational licences to the tune of $137.5 million over 20 years for mobile networks and $5 million for fixed operators.
Zimbabwe is amongst the most expensive licencing countries in Africa at these costs, a move which again drains the service providers, a cost they pass on to users like me and you in their pricing.
To add pressure on the already suffocating industry, Zimbabwe has been facing serious power supply challenges, cutting seriously on production and adding pressure to the costs, as they seek alternative energy mainly via generators and solar panels
The cost of running a network on diesel and solar has come as an extra unintended cost to the traditional model that had planned and budgeted on a moderate power supply.
These costs are also not part of the regional equivalent, but unique to us for a much longer time
Taxation in Zimbabwe against telecommunication operators is so significant that after all is said and done, companies are largely taxed an arm and leg, a cost which operators then pass on to us subscribers.
Zimbabwe mobile network operators are charged a five percent health levy, 15 percent VAT, 25 percent corporate tax, three percent universal service fee, 10 percent excise duties on revenue and two percent IMT tax.
Mobile operators face other regulatory levies and taxes of 3.5 percent, bringing the total taxes to approximately 28 percent for every dollar they make.
Every phone call receives a tax of US 6 cents per minute on international incoming traffic demanded in foreign currency.
While it’s fashionable for us to compare the pricing of services, products and data with regional players, we must do so with a very conscious mind, that is awakened to different environments and costs.
If the extra burdening costs are unique to Zimbabwe, it would be an uninformed argument to argue that the output product of a different processing system must be the same simply because we are all in the same continental region
Zimbabwe’s government has continuously increased tariffs for Zinara toll gates, allowing them to change their prices weekly as the RTGS currency fluctuates, we are not seeing any public anger toward that as an acceptable system towards viability.
The biggest question is why only one such sector including parking fees is allowed to cushion itself against the weakening local currency daily while the other sectors are not allowed to adjust accordingly.
I would never support any system that makes life difficult for ordinary Zimbabwe, but we must not be myopic and treat the industry differently, the biggest problem has been an unstable economic environment that needs to be seriously attended to and we can’t sacrifice one sector, selectively st the expense of the private players