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A note to our Zambian clients on the value of the kwacha

3 October 2015 08:13:59 +0000

As you have no doubt noticed too, the recent slide in the value of the kwacha has not escaped our notice.

Although we bill and accept payment locally in kwachas, most of NinerNet’s expenses are paid in foreign currency to offshore suppliers where our servers are located. The reliability of these offshore systems is one of the reasons we’ve heard from our clients for choosing NinerNet over other local companies with data centres in Zambia. Before the current situation, our kwacha pricing had already fallen behind the kwacha’s trajectory against the US dollar, and we were considering options to address this that did not involve a pricing shock to you, our client, and simultaneously laid out plans for future price changes (even decreases) in a predictable manner.

When we first started operating in Zambia we, like many companies, invoiced in US dollars while accepting payment in kwachas. In 2012 the Government issued The Bank of Zambia (Currency) Regulations, 2012, outlawing the use of foreign currencies for domestic transactions. As NinerNet Communications is a Zambian-registered turnover tax company, we complied. For philosophical reasons (not the least of which was to keep our pricing predictable) we did not return to invoicing in US dollars when this law was later rescinded, and the kwacha rates we set in 2012 have not changed in the three years since.

Unless the kwacha loses further value in a short period of time, this is an issue that we will deal with gradually over the next few months by bringing our kwacha rates back into line with the kwacha’s value against the US dollar.

Effective with our October 2015 invoicing at the middle of the month, our rates will increase by K3.00 per US dollar — i.e., from the K5.50 per US dollar we set in 2012 to K8.50 per US dollar. In other words — to use our most popular hosting plan (webONE) as an example — if the monthly rate was K82.50, the rate effective with this month’s billing will be K127.50. Similarly, our price for generic top-level domains (e.g., dot-com) will increase from K104.50 per year to K161.50 per year. (We will leave the price of our alternative top-level domain for Zambia [dot-zam.co] at K66.00 per year.) You can use our US dollar rates page to see where things are going; our kwacha rates page will be updated in the next few days to reflect rates at the current exchange rate that will be charged for all NEW business.

Something important to note is that accounts that are already paid up to a certain expiry date will NOT be affected. In other words, if your expiry date is set at 1 June 2016 (for example), your hosting will still expire on that date and you will not be billed anything extra. This will also continue to apply into the future; your expiry date will remain your expiry date no matter what happens to the exchange rate in the meantime. Refunds for cancelled hosting will be refunded at the rate that was paid at the time the service was invoiced.

We would like to return to stable and predictable kwacha rates as soon as possible. Assuming that the exchange rate does indeed stabilise in the near term, we will look at revising our kwacha rates — up or down, as the case may be — every three months going forward to avoid sudden changes like the one we are being forced to implement today. Of course, if there are any wild swings like there have been since the beginning of September we will have no choice but to react more quickly.

We welcome any feedback you may have on our plans. Thank-you for your understanding, and thank-you for your business.

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This is the corporate blog of NinerNet Communications. It's where we post announcements, inform and educate our clients, and discuss issues related to the Internet (web and email) hosting business and all that that entails. This includes such concomitant industries and activities such a domain registration, SSL certificates, online back-up, virtual private servers (VPS), cloud hosting, etc. Please visit our main website for more information about us.

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