Mobile telecommunications company, MTC, has justified the recently announced 7 percent tariff adjustment, saying it was necessitated by the rising cost of doing business over the years.
The mobile telecommunications giant has received criticism from disgruntled customers after it announced last week a subscription average increase of 7 percent on both pre-paid and post-paid products.
The price increase on certain Aweh products will be effective from 1 June 2017, while the price increase on post-paid products, such as, Select, Netman, Mobiz and data bundles, will come into effect a month later.
In a statement, Chief Human Capital and Corporate Affairs Officer, Tim Ekandjo, explained that MTC applied for a tariff increase in terms of Section 53(7) of the Communications Act on 10 February 2017 and complied with all the requirements in terms of the Act. “This is not a seven percent increase, but an average of seven percent increase on certain products, and we would like to refer our customers to the MTC website to verify the exact increases.
“Secondly, the VAT charged on recharge vouchers did not increase. VAT is set and determined by the Ministry of Finance and MTC does not benefit anything from the VAT charged on recharge vouchers,” he said.
Ekandjo said the increases were above board, as they were approved by the sector regulator, the Communications Regulatory Authority of Namibia (CRAN).
“I can confirm that no objections were received from the public and MTC received CRAN’s approval on 27 April 2017 for tariff implementation effective 1 May 2017. MTC, however, deemed it necessary to delay the increases by another month to give ourselves time to inform our customers first. “MTC has not had an increase for the past 11 years, and we, like any other business, operate within a very turbulent business environment affected by so many external factors beyond our control.”
Ekandjo highlighted that eight years ago, it cost them just over N$600,000 to erect a single tower in an urban area, while today it costs between N$1,5-N$2,5 million to do the same because of the ever-rising costs of steel, labour, power, and rentals, among other issues.