Econet tariff hike setback as court steps in

Google+ Pinterest LinkedIn Tumblr +

ECONET Wireless (Pvt) Ltd mobile subscribers got a reprieve after the Administrative Court stopped the firm’s bid to increase tariffs as clients are already reeling from high charges. Econet wanted to raise charges to a maximum 21 cents per minute against 15 cents set by the Postal and Telecommunication Regulatory Authority (Potraz). The tariffs are set to be reduced further over a three-year period to 2017.Econet-Wireless

In 2014, Potraz ordered mobile operators to slash voice tariffs from 23 cents to 15 cents with effect from January this year. The regulatory authority also directed that tariffs be further adjusted to 12 cents in 2016 and then 9 cents in 2017. The tariff reduction directive is part of Potraz’s implementation of a new pricing model called the long run incremental cost (LRIC) model approved in June last year.

Justice Herbert Mandeya last week threw out an appeal by Econet to increase tariffs for its products across the board. With a subscriber base of about nine million, Econet is by far the country’s largest mobile operator controlling over 60 percent of the mobile market. The ruling means that Econet, together with Telecel and NetOne, will continue charging the rates set by Potraz following a research into appropriate rates in October last year.


Last year, Potraz issued a directive for all mobile telephone networks to reduce their tariffs. The regulatory determination was the result of research spanning almost two years whereby comparative studies were carried out in economies such as South Africa, Zambia and Botswana.

The country’s three mobile network operators, Econet, Telecel and NetOne all participated in the research project. However, when Potraz issued the determination in October last year, Econet cried foul. It immediately filed an urgent chamber application at the High Court, which refused to entertain the matter because it was not urgent.

An appeal to the Supreme Court against the High Court decision was withdrawn at the hearing in March this year after Econet’s lawyers conceded that they had not sought leave of the High Court judge to appeal to the superior court.

When it issued the regulatory determination, Potraz set December 1, 2014 as the deadline by which all mobile telephone networks were to have submitted their tariffs for approval. Econet did submit its application, but the tariffs were above the maximum as set by Potraz in the regulatory determination.

In so doing, Econet argued that it could not be put on the same level as Telecel and NetOne as it was the only network that had paid its operating licence fees in full. Econet’s licence was due for renewal in 2013.

The firm also argued that the regulatory determination setting tariff thresholds was discriminatory in both application and its effects. In submitting its tariffs in November last year, Econet stated in its correspondence with Potraz that it was doing so “without prejudice” to its rights to pursue the appeal at the Supreme Court.

Potraz rejected the tariffs proposed by Econet, resulting in the firm noting an appeal to the then Minister of Information, Communication Technology, Postal and Courier Services, in terms of Section 46 of the Postal and Telecommunications Act, Chapter 12: 05.

The then Acting Minister Christopher Mushowe dismissed the appeal on December 30, resulting in Econet noting an appeal to the Administrative Court in January this year. At the hearing on October 26 this year, Potraz took the preliminary point that the matter was not properly before the court as a result of Econet having branded its application “without prejudice”.

The application by Econet to Potraz was dated November 28, 2014 and was prefixed with the sentence “pending the determination of the matter, and on an entirely without prejudice basis, we hereby submit our tariff schedule for the period…”

In judgment handed down last Friday, Justice Mandeya said the context in which the phrase was used suggested that it was deliberately chosen and inserted in that matter. “The result of labelling communication without prejudice is unfortunately that the communication can’t be used in litigation since it was made to facilitate negotiations between the parties,” said Justice Mandeya.

“For that reason, the court finds that the appellant has brought to court what should not have been taken to court. The matter is for that reason not properly before it. It is dismissed.” Tawanda Nyambirai of Mtetwa and Nyambirai represented Econet while James Chikobvu Muzangaza, of Muzangaza, Mandaza and Tomana acted for Potraz.Herald