Johanna Mangobe selling airtime in one of the streets in Harare, Zimbabwe. Pic Zimobile

The advent of mobile phones have revolutionised the way people communicate by making it easy and fast. In Zimbabwe, like the high growth rates seen in the sub-Sahara region, the mobile penetration rate is over 100%

According to GSMA more than half the population of Sub-Saharan Africa will be subscribed to a mobile service by 2025. However, the growth rate in Zimbabwe might slow down due to affordability challenges if measures are not put in place to curb the high cost of voice and data.

The announcement of the 2% electronic transaction tax by finance minister, Mthuli Ncube, has seen the cost of voice and data; pre-paid scratch cards going up. Ultimately, mobile phone subscribers will have to dig deeper into their pockets.

For example, a prepaid scratch card that used to cost $1 now costs $1.20/25 and are sold in the street by vendors.

“I am now charging, for example, scratch cards that used to cost a $1 for $1.20 each because where we order them; the prices have gone up. If I charge a dollar, I would not make profit. Our customers are complaining about the increase and I am fast losing business” said Johanna Mangobe an airtime vendor in Harare.

Johanna Mangobe. Pic Zimobile

Many people have stopped using pre-paid scratch cards opting to buy airtime electronically.

“The issue of mobile money has been a topical issue in Zimbabwe because of cash shortages. People are using mobile banking platforms to make payments. This has come in handy for the ordinary person because it is convenient; relatively cheaper than the normal brick and mortar banking” said Prosper Chitambara an economist.

More than 96% of monitory transactions, according to the Reserve Bank of Zimbabwe, are now conducted through plastic, internet and mobile money.

The high cost of data.

Most Zimbabweans are struggling to meet the costs of data and communication. The experiences of most Zimbabweans is mostly limited to making and receiving calls, sending and receiving SMSs, using instant messaging apps like WhatsApp.

A study by Ecobank states that for 1GB out-of-bundle data; Zimbabwe is the most expensive in Sadc at $25. The Sadc average price is $10,09 per GB. Zimbabwe’s 1GB of data cost is 16 percent of average monthly income, making it the most expensive in Sub-Saharan Africa.

Vendors are losing income

Most ordinary citizens had found work through selling airtime in the form of prepaid scratch cards. Some vendors who used to operate at traffic lights have stopped due to the rise in the use of electronic payments.

In 2016, Mobile Network Operators defied a government directive to scrap the use of airtime scratch cards as part of reducing litter pollution. The position taken by MNOs saved jobs of many vendors who relied on selling airtime for livelihood.

Albeit the preceding development, many people are now buying airtime through plastic money or mobile money service providers like Ecocash, Telecash and OneWallet.

“People are now using plastic and mobile money and they are no longer buying scratch cards. As you can see vendors at this vegetable market no longer sell prepaid scratch cards” said Pamela Nyandoro a vendor in one of Harare’s medium density suburb of Eastlea.

Pamela Nyandoro. Pic Zimobile

Airtime, bill and merchant payments using mobile money totalled $1,623,469,563 in 2017 according to Postal and Telecommunications Regulatory Authority of Zimbabwe.

There is also a positive side to doing away with pre-paid scratch cards albeit the outcry from vendors.

Research by Strand Consult states, “many operators can significantly increase their earnings if they choose to discontinue the traditional scratch cards that are currently being used by many customers to top-up their mobile account. The scratch cards can quite simply be replaced by topping up electronically.”

In practice, an analysis of the costs an operator has on producing, marketing, distributing and selling prepaid scratch cards results in most operators using between 18 and 27% of their sold airtime revenue on production, distribution and commission costs, every time they sell a prepaid scratch card Strand Consult states.

In the same vein, the new tax being levied on electronic money transfers are forcing consumers to dig even deeper into their pockets. In a recent announcement Ecocash told its subscribers that all transactions of $10 and below are not charged the 2% IMT government tax.

“The implications of the 2% electronic tax to the ordinary citizens is a bit early to ascertain. In terms of the increase in prices; they has been an across the board increase in prices of commodities as a result of the measures that were introduced in the fiscal and monitory policy statements including the 2% tax. It’s actually a cost. It’s the final consumer who will bear the brunt and service providers will levy that on the consumer” said Chitambara.

 

 

 

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