Telecommunications companies operating in Zimbabwe are now subject to stringent financial penalties for substandard service delivery, as stipulated by the newly amended Statutory Instrument 154 of 2024. This legislative update revises the existing Postal and Telecommunications (Quality of Service) Regulations to address the growing concerns over service reliability in the face of increasing competition, particularly with the entry of Starlink into the market.
The updated regulations are designed to safeguard consumers from the frustrations of unreliable telecommunications services, such as dropped calls, slow internet speeds, and delays in text message delivery. The Postal and Regulatory Authority of Zimbabwe (POTRAZ) is tasked with the enforcement of these fines, holding telecom operators accountable for their service quality.
Under the revised framework, telecom companies that do not meet the established quality of service benchmarks for a period of three months will be liable for fines. These benchmarks include metrics like the rate of dropped calls, the success rate of call setups, the availability of cellular service, the success rate of data service access, and the rate at which data services are dropped. A fine of up to $200 may be imposed for each cell tower that does not meet these criteria, with the same penalty applicable for delayed or undelivered text messages.
Furthermore, network outages that exceed a duration of three hours will trigger a fine of $5,000, with an additional $5,000 levied for each subsequent hour of downtime. Telecom companies that fail to uphold standards for interconnection links are also at risk of incurring fines of up to $5,000 per incident. Additionally, the failure to submit required network performance data could result in a monthly fine of up to $5,000.
To ensure a high level of service quality, the government has established specific targets for telecom operators. The Data Service Access Success Rate (DSASR) must be no less than 95%, and the Data Service Drop Rate (DSDR) is capped at a maximum of 2%.
While these regulatory measures are intended to improve the user experience, they present significant challenges for telecom companies, which may find it difficult to comply with the new standards. Zimbabwe’s ongoing electricity shortages have forced mobile operators to depend on diesel generators and other alternative power sources to maintain their network infrastructure.
Additionally, major telecom providers such as Econet, NetOne, and Telecel have been experiencing financial losses. Econet’s 2024 annual report disclosed a net loss of $73 million for the fiscal year ending in February 2024.
A report from July 2024 highlighted that the government incurred losses of at least $200 million through NetOne, a state-owned technology enterprise, over a two-year period. In May 2023, Telecel, another state-owned mobile service provider, underwent corporate restructuring to stave off liquidation.
In an effort to mitigate the impact of hyperinflation on their operations, telecom companies petitioned the government in March 2023 to allow them to set their tariffs in US dollars rather than the local Zimbabwean currency. This request came despite a previous authorization from the regulatory body, POTRAZ, for a 50% increase in tariffs.
