Tanzania: Rising Mobile Money Transfers Raise Cost of Living

Tanzania Telecom tariffs:

Tanzanians are forced to dig deeper into their pockets as the government has increased the cost of mobile money transfers. Since July of this year, Tanzanians have seen the costs of sending and withdrawing money skyrocket.

The government, through parliament, passed a bill to increase charges, arguing that the additional tax is necessary for national development projects. The government amended the Electronic and Postal Communications Act (CAP 306), which allowed it to impose a tax on mobile money transactions based on the amount sent and withdrawn.

At 17 percent, Tanzania’s excise rate on mobile phone services is the second highest in Africa, just behind Zambia.

The amount is an increase from the previous 14.5% which had been increased in 2014. At that time, it was explained that the tax increase was intended to compensate the government for what it explained as ” loss of income resulting from the withdrawal of the SIM card. tax during the 2013/14 financial year. ‘

Well, now the government has offered to refund the SIM card tax at a rate of up to $ 0.09 (Tsh 200) per day per SIM card.

“I propose to modify the law on electronic and postal communications as follows. To impose a levy of between $ 0.0043 and $ 0.09 per SIM card depending on the user’s ability to top up the balance”, said the country’s finance minister, Mwigulu Nchemba.

So not only is the government increasing fees on mobile money transfers, it also charges a fee for simply having a SIM card. The public outcry and outcry was huge, so much so that 6th President Samia Suluhu called on the finance ministry to review the bill and find a possibility to reform the bill and lower the charges.

Plight time limit bundles persist

To make matters worse, not only has the mobile money transfer fee been increased, but unlike elsewhere in the East African Community (EAC) when you purchase a telecom plan (data, voice call, or SMS) in Tanzania it comes with a time stamp. The time stamp varies from day to month, and when your time is up, service is interrupted, even if you still have unused data, airtime, or text messages.

Three months ago, this outrageous sales tactic that benefits the poor unwittingly buying what appears to be affordable offers at first glance only to find out that the “many” MBs or minutes or texts were for a limited time only.

So you could literally buy a one month plan that will actually only last you a week!

This was all supposed to be a thing of the past in April this year, when the government stepped in and released a slew of new telecommunications regulations. Through its ICT watchdog, the Tanzania Communications Regulatory Authority (TCRA), the government issued some 13 new regulations and among them, these time-based telecommunications bundles needed to be ended.

Well it all sounded like pitch and cream until you read between the lines. For the sake of argument, let’s look at the time limit packages and what the regulation asked the telecoms to do or rather how the telecoms reshuffled the TCRA order to get rid of the time limit.

The telecoms have agreed that “the packages will no longer have an expiration date …” (wait for it) “… if the customer recharges the package before it expires! “

And: “The user will be notified to top up when the plan is 75% exhausted and again when it is completely exhausted. “

So the timestamp of the telecom packages was never really removed because the public was led to believe it, instead it was coated in sugar, the wolf went back to the forest, put on the sheepskin and came back to get the three little pigs or is it Little Red Riding Hood?

All in all, the wolf of telecommunications has dressed up in sheepskin and has returned to devour the innocent, unprotected public. Let’s review the order of the regulator and what the telecoms actually did.

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A cycle of poverty: the infinite loop of bundles of deadlines

The government ordered the removal of time-limited plans from April 2, telecoms agreed but made a condition: “you will not lose your unused data, airtime or text messages if and only if you buy the same package in capsule before its expiration “.

In other words, they’ve really made matters worse for the common man who chooses to buy the time-locked plans in the first place because they promise to deliver a lot more data, airtime, and data. texts at a reasonably affordable price.

However, when the time expires you lose the unused part of the plan, you go back and force that user to buy another plan simply forces them into an endless loop of buying more plans to save their already paid for unused. package!

Why has the government, through the TCRA, not simply ordered the end of this loop which, in effect, imposes a cycle of poverty on people who are already poor? The country has just gone from a per capita rate of one dollar a day, these packages cost on average just over a dollar a day, forcing someone to spend their whole day earning to communicate with loved ones is just plain wrong.

Granted, it’s a free saving, so fine, I chose to spend my entire day communicating, and then at least let myself use the entire service I purchased. It’s a trick, if not a steal in the light of day, to get me to “get more” only to win if I don’t use it fully within a given time frame.

Kenya takes telecoms to court for time-limited packages

If my approach seems like a hard-line position, consider the fact that in Kenya telecoms companies were taken to court for the same lifespan packages in 2019. And Kenyans have been enjoying their money ever since. hard earned until the last cent or shall we say the last MB.

“… Safaricom on Wednesday (October 23, 2019) abolished the expiration dates of the data plans it offers, in what it said was to celebrate its 19 years of service,” wrote a regional media outlet.

In the article titled “Safaricom Removes Deadlines on Data Plans,” the document clarifies that Safaricom’s decision to remove time-limited plans was not due to sheer goodwill or the pleasure of celebrating nearly two decades of “limited time plan profits, but rather because the company along with two other major telecommunications companies were facing a class action lawsuit over the high cost of data and arbitrary expiration or paid plans.”

Kenya is not the only country to sue telecoms and protect its people from unscrupulous profiteers. In that same October 2019, across the continent in West Africa, Ghana also asked its telecommunications operators to remove restrictions on data, the newspaper writes.

In Ghana, however, it appears the telecom giants have gotten away with lobbying on the condition that they have now imposed on Tanzanians the unused but paid portion of the plan will be postponed if, and only if, the user. purchases the package again; the infinite time limit package aka the cycle of poverty.

As these deceptive and deceptive advertising tactics push already poor peasants further into the abyss of poverty, the multinational telecom giants continue to make ever-incredible profits every year.

Consider this, the sued Kenyan Safaricom is in fact the most profitable telecommunications company in East Africa pocketing a net income of $ 598 million collected from over 33 million subscribers1 who are unwittingly forced into purchase these time-limited packages among other services.

1African Business Magazine an annual survey (April 9, 2020)

Where is the Tanzania Consumer Protection Commission located?

When you run million dollar ads on radio, TV, on larger than life billboards saying GET MORE FOR LESS, then just send a small print text message saying “top up to save money.” unused package ‘and expect half-educated rural peasants to choose the best option, this is tantamount to misleading the consumer (and if he doesn’t, he should) because the public is not sufficiently informed to make the appropriate decision.

It is illegal for a business to engage in conduct that misleads or deceives or is likely to mislead or deceive consumers or other businesses. This law applies even if you did not intend to mislead or deceive anyone or if no one has suffered loss or damage as a result of your conduct – Australian law.

Packages suspended at higher rate

The telecommunications saga in Tanzania does not end with time-limited plans on the same day, April 2, 2021, when telecoms were asked to get rid of time-limited plans, the People’s Government again stepped in on behalf of the people as telecommunications companies in the country tried to increase service charges.

Unfortunately, as was the case with time-limited packages, what the public failed to understand was that the new, higher rates on offer were only suspended, not refused or revoked. In April, all Tanzanian telecommunications companies increased the prices for voice calls, data and short messaging services.

The giant multinationals defended the move, arguing that the new tariffs were only in line with their intention to align them with new regulations issued by the Tanzania Communications Regulatory Authority (TCRA). However, the government, through that same regulator, reacted to the public outcry and quickly suspended the new data charges.

“The TCRA is temporarily suspending the new data plans to allow service providers to conduct a detailed analysis which should lead to new tariffs that effectively take into account the interests of consumers,” the government statement said.

“The prices for voice calls and short messaging have come down, which is good, but for data, the prices have increased unexpectedly. The prices for voice and SMS will remain unchanged, but those for data were immediately suspended ”it was concluded.

New TCRA regulations also require service providers to seek TCRA approval before “meddling” with package pricing. It remains to be seen whether the higher suspended loads will be dropped or applied.

However, given that the government has proposed to increase the tax on mobile money transfers and to start taxing SIM cards on a daily basis, one can only anticipate that prices will rise, in some way or another. other.

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