TNM, one of Malawi’s mobile phone service providers, says the fall of the kwacha has compelled the firm to raise tariffs by an average 30 percent effective March 8 this year.
“The Malawi kwacha has depreciated by more than 120 percent in the past year and this has resulted in significant increases in the cost base of TNM,” said TNM in a statement published last week.
The company said since expenditure for investment in infrastructure for telecommunication and the operational costs to support the network are mainly denominated in foreign currencies, TNM has seen the costs doubling in value.
The Malawi Stock Exchange (MSE) listed firm said the cost of utilities and services has significantly increased over the past year and eroded the returns for telecommunication operators.
Since the devaluation and floatation of the kwacha in May 2012, the local unit has slumped by over 130 percent against the dollar driving prices of goods and services up.
However, TNM in the statement said much as it believes that the tariffs for telecommunication services must be made more affordable for the customers, the tariffs must also support the sustainability of the operators and their ability to continue to develop new services and technologies.
The statement, among others, said standard pre-paid tariff calls during peak period to another TNM number will be billed at an equivalent of K66 (about $0.16) per minute while off peak period will be billed at an equivalent of K33 (about $0.08) per minute.
The company said that standard pre-paid tariffs to another local network will be billed at an equivalent of K79.80 (about $0.20) per minute during peak period and an equivalent of K47 (about $0.12) per minute off peak.
TNM, a subsidiary of conglomerate Press Corporation Limited (PCL) is not alone. Another PCL subsidiary, Carlsberg Malawi Limited last week indicated that it will continue to adjust upwards prices of its products as long as the kwacha remains unstable.
The increase in the tariffs by TNM is certainly going to make communication out of reach of most people and worsen Malawi’s cellular mobile penetration which stands at 33 percent, one of the lowest in the region.