Internet data charges in Zimbabwe rank amongst the most expensive in Africa. The fact that the economy continues to limp makes data regarded as a luxury. This is a crippling blow to most entrepreneurs as new media (internet & social media) now anchors business strategy. In February this year, the RBZ Governor presented his latest monetary policy statement (MPS). The major highlight was the admission of the impracticality of the 1:1 parity between the USD & bond. This was the pretext to the most sensational announcement from his MPS which was the introduction of the term: RTGS dollar. Simply put, the RTGS dollar is supposedly meant to denote either bond notes, coins, or electronic balances. All this has led to a recent development which I’m elaborating herein.

The Self-Contradictory MPS

First and foremost let me hasten to note that Mr. Mangudya pointed out that the USD would now essentially be equivalent to RTGS$2.5 – the Interbank official exchange rate. Furthermore, he also emphasized that despite this new development prices would remain the same. Let’s back up a bit – before this MPS the USD: bond parity was still in effect i.e. if you went into a supermarket to buy $20 worth of goods, USD20 was as good as 20bond. Now there is an Interbank exchange rate of 1:2.5 and then he insists prices won’t change. That is simply untenable.

ZOL’s Futile Propaganda

Recently ZOL issued a public notice saying they were adding more data on their capped options with effect from April. They then cited that owing to the recent MPS they have to realign their prices accordingly. Thus, they indicated that the USD charges they started off with would remain static and then they listedrTGS dollar charges as well. Then at an attempt to make it palatable, they emphasized that this was going to be the equivalent of an actual decrease in the cost of data per gigabyte. Apparently, upon close analysis, this is just a semantic trick meant to deceive people into thinking the adjustments aren’t an increase in price.

I’ll just take a close look at two of their capped packages i.e. Lite & Family Essential packages. The Lite initially costed USD29, now it costs RTGS$72.50. The Family Essentials costed USD89 which now costs RTGS$222.50. The Lite package initially used to be 25 gigabytes, now it’s 40 gigabytes whereas the Family Essentials was 75 gigabytes and is now 100 gigabytes. If you calculate to determine the costs per gigabyte you’ll notice that the Lite package used to cost 86 cents but is now down to 55 cents; Family Essentials used to cost 84 cents and has gone down to 45 cents. So this supposedly is the basis of their argument that the price per gigabyte has actually gone down. However, I personally don’t buy that – I’ll explain why later on.

TelOne Follows Suit With A Different Approach

TelOne also recently made price adjustments but they didn’t try to use flowery overtures as ZOL did. They simply announced that they were adjusting prices to realign with the recent MPS. Thus, their Home Basic is now USD15 or RTGS$37.50 with a cap of 10 gigabytes whilst the Home Plus is now USD25 or RTGS$62.50 with a cap of 30 gigabytes.

The Prices Have Actually Gone Up

So what these companies have done is that they have applied the 1:2.5 exchange rate to the initial USD prices to determine the RTGS dollar prices. This they have done in the guise of realigning themselves to the dictates of the MPS. This actually makes it plain how fallacious it was for the Governor to even mention that prices wouldn’t change – of course, they would.

If you recall, dual pricing came into play sometime this year (mostly for informal establishments). Before that, the 1:1 parity was still in effect (RTGS dollar didn’t exist). This meant that if something was USD29 it was essentially 20bond. For instance, I know that ZOL did make some price adjustments last year – so the once USD29 Lite package was reviewed upwards to USD32. However, that was as good as 32bond because people were paying using even bond or Ecocash without any dual pricing – come to think of it, the RTGS$ was just there but with no name yet. So if that package is now RTGS$72.50 it essentially means it has shot up from RTGS$32 to RTGS$72.50 – a 127% increase. If you consider the TelOne Home Basic package, it’s a 150% price hike.

So let’s just call a spade a spade; the prices have actually gone up. The most honorable thing ZOL should have at least done was, to be honest, and not try to deceive people. At least TelOne simply said they are adjusting prices based on the new Interbank exchange rate of 1:2.5.

Overall, people are fuming at the price adjustments because they are just too high. Sadly it’s a Catch-22 situation for internet service providers because it is the government’s haphazard and ill-thought policies that have hamstrung them to make such adjustments. It was recently reported that there has been a 1.5 million-litre decrease in local fuel consumption between January and February this year – all because of MPS and price reviews. I wouldn’t be surprised if we see a sharp decline in internet data consumption in the months ahead.