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» 28.01.2011 - Large grant for Malawi transport sector
» 07.01.2011 - Giant grant for Malawi power supply
» 21.09.2010 - Zambia, Malawi finally connected by rail
» 20.11.2009 - Malawi’s rural land development project gets additional funding
» 23.10.2009 - Malawi signs $60 million road project funding with AfDB
» 27.08.2009 - New teacher training college for Malawi
» 21.05.2008 - 'Regional integration cardinal in addressing energy shortage'
» 03.04.2006 - IATA suspends Air Malawi

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Economy - Development | Technology

Malawi Telecom to get competition on fixed lines

afrol News / The Chronicle, 19 June - Malawi's Information Minister Patricia Kaliati has disclosed that the government is advertising for the second fixed line operator to enhance competition with the country's only operator the Malawi Telecoms Limited (MTL), 'The Chronicle' has learnt.

"If we can have a competitor in this area, then the quality of service would subsequently improve," said Minister Kaliati on her return from South Africa, where she was attending a meeting on NEPAD broadband ITC infrastructure.

Ms Kaliati said the government of Malawi would like to improve the sector so that the services could also be affordable, saying they would also like to have a number of mobile phone service providers if the congestion of the country's telecommunication traffic will be improved.

MTL, the only fixed line operator in the country, was controversially privatised and sold on 13 December last year, to a consortium called Telecom Holdings Limited (THL) against a heavy campaign from national civil society organisations. which called on the government to rescind its decision as they argued that it was sold at a low price.

The Company was sold at kwacha 3.6 billion (euro 20.5 million), which the civil society institutions contended that it was too meagre since its assets base estimated at kwacha 7.6 billion (euro 43.2 million) was above the offer price twice times as much.

Mabvuto Bamusi, Malawi Economic Justice Network (MEJN) Executive Director, argued then that the MTL sale price was seriously and glossily understated because its financial report provided evidence that it was a viable profit making public enterprise and that its capacity to generate profits was assured indefinitely.

"MTL makes cash sales of between kwacha 102 and 125 million [euro 580,000 and 710,000] a week which translates to over kwacha 400 million [euro 2.3 million] per month and averages over kwacha 5.8 billion [euro 33.0 million] per annum," Mr Bamusi said then. He even accused Malawian Finance Minister Goodall Gondwe and Chief Executive of the Press Corporation, which is leading the THL consortium, for deliberately distorting information on MTL.

According to Mr Bamusi, the two deliberately said MTL has merely 57,000 fixed lines when it had over 80,000 lines, which were making a kwacha 5,760 [euro 33] average per day creating income of kwacha 138.00 [euro 0.78] per fixed line per day. At the time of sale, MTL was believed to be making a total of kwacha 11 billion [euro 62 million] in sales from fixed lines a year, which was three times the value of its sale price.

But with the second fixed line operator, Minister Kaliati said the current fixed lines would be even enhanced and a lot of competitively advanced services would be introduced - unlike in the current situation, where MTL can choose to perform in any manner it desires.

MTL Director of Finance Ken Thuzi said since THL took over MTL, a lot of things have tremendously improved and a lot more are yet to come. "We have now introduced a very special service of liberty fixed wireless phone service," he said in Lilongwe during a golf competition the company was sponsoring recently.

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