Zimbabwe’s telecommunications sector is heading for a bitter dispute with the Post and Telcommunications Regulatory Authority of Zimbabwe (POTRAZ) over proposed new minimum termination rates for fixed and mobile international traffic, which firms say favour the state-run fixed operator, TelOne.

Responding to criticism over delays in bringing the country's termination rates for incoming international calls to viable levels that are also in line with the regional average, POTRAZ has announced that with effect from November 1, calls terminating on the fixed network would be charged at US$0.07, while those terminating on mobile operators will be charged at US$0.20. A US$0.15 charge will apply to calls in the mobile via fixed termination category.

  However, telecommunications operators, while acknowledging the need to lift the termination rates from as low as US$0.03 to levels that would enhance their foreign currency generative capacity, have cried foul at the discrepancy between the termination rate for the fixed network, which is less than half that proposed for the country's three mobile operators, all of which operate their own international gate-ways.

Econet Wireless Zimbabwe chief executive, Douglas Mboweni, whose company is the largest telecommunications operator in the country with about 57 percent share of the whole market, said his company was concerned by the development.

"Our argument is that let us have a single termination rate to avoid dumping of international traffic at cheaper rates, which will continue to prejudice the country the much needed foreign currency. There now seems to be an attempt to give TelOne the monopoly to carry our traffic as well, which is why we are totally against and will vigorously resist because it is illegal according to our licence provisions," Mboweni said.

There is apprehension in the industry, in light of state media reports that recommendations have been made for government to "shut down" all other international gateways operated by TelOne's competitors.

"All operators have the right, conferred by licences granted by POTRAZ, to operate international gateways to carry international traffic originating and terminating on their own networks. That right, unfortunately, is being threatened by this statutory instrument because it is heavily biased and in favour of TelOne and we believe this issue needs to be addressed urgently," Mboweni added.

An industry expert who declined to be named for professional reasons said the regulator should fix a flat minimum termination rate and let operators use their competitiveness to capture a share of the market. "Put simply, it's like saying only TelOne should operate a gateway," the expert said.

"TelOne lost the monopoly to operate an international gateway when the telecoms market was liberalised. Now we seem to be seeing yet another attempt to bring back this scenario, albeit through legislation which can be easily challenged because it is patently unfair, discriminatory and definitely not good for business or for the country," he added.

Reserve Bank governor Gideon Gono, who estimates that the country could have earned as much as US$75 million over a two-year period running up to January 2002, has called for a single termination rate in the US$0.20 to US$0.25 range. Current termination rates range between US$0.03 to US$0.12, with TelOne's rate being the lowest in the market.

Financial Gazette