Discussion: Effect of Ecocash raising minimum airtime topup to $1

Recently Ecocash upgraded their minimum Econet airtime topup to $1. This was met off course with an expected backlash from Econet subscribers. The main complaints were that Econet went ahead and reviewed the terms of service without consultations, that $1 was un-affordable and that the new minimum somewhat discriminated against a cross section of consumers who  rely on low value transactions.

Considering that once you top-up, you are most likely going to spent the single dollar on that one critical call and numerous unplanned ones, it becomes apparent that where the real value of calls was going to be $0.50 or less, by default, a dollar is spent. In other words Ecocash, monopolistic and unchallenged have overnight driven Consumer Expenditure of low value transactions to double.

The true nature of this move in reflection is that in a way it goes back to the controversial billing regime that preceded per-second billing. whether or not you had enjoyed the full value of a minute, you were forced to pay for it. In the same manner that this capitalistic animal was driven out, one is tempted to think the authorities ought to act against this move. In fact, as we migrate to paperless airtime vending, consumers ought to be able to purchase the minimum credit required for a service, which in this case could be the cost of a single minute of voice pegged at 7c currently. Whether the move to increase the minimum topup warrants regulatory intervention or whether the terms of service have ever seen the light of day is a discussion for another day. What is clear is the recent fee matrix poses a question as to the adequacy of Regulation of Mobile Money in terms of the QoS or Regulation of Telecoms in terms of the draft Consumer Protection regulations of 2016 particularly Section 4.6. (The Right to Protection Against Market Abuse).

Again the verity of this move financial can be brought out in this scenario. Previously a top up of 10c was possible from Ecocash. A hypothetical 1m subscribers would top up $100,000 say per day. This shifted to a minimum of $0.50 taking the total to $500,000 and the current $1,000,000.

The most affected niche of course are those who can really do nothing about it. The typical high-volume low-value customers who do not know the power of their dollar when aggregated with others.  The same consumers who cannot be inconvenienced to choose a better service elsewhere and  ultimately adjust to the new regime.

On their part Ecocash did not venture to offer a convincing explanation as to why they had made that move except that it was necessitated by the need to improve service. Speculation would suggest that Econet is either on a mission to increase the Average Revenue Per User currently pegged below $7, or (and) hedging against the decreasing value of a dollar, compounded recently by the sudden depreciation of the Bond against real currencies.To make business sense, Econet must increase their revenue base in tandem with prevailing economics.

One could also foolishly venture to think that perhaps systems capability (or lack of it)  had a hand in it considering that a real bank like CABS can go beyond a week struggling with a system upgrade. It is folly however to think that Ecocash technology partners award winning Mahindra Comviva could fail to put dots in between digits.

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