MNOs speak on new digital strategy
Mobile Network Operations (MNOs) have welcomed government’s plan to make Internet and mobile devices affordable for the Malawian population, by among others, reducing taxes.
The operators say the reduction in taxes will also make data costs cheaper.
The MNOs were reacting to the Malawi Digital Economy Strategy (2021-2026) which seeks to increase Internet usage to 80 percent of the population by 2026 from the current 13.8 percent.
The strategy which is prepared by the National Planning Commission (NPC) also seeks to further increase device ownership from 52 percent to 80 percent of the population by 2026.
In the strategy government acknowledges that affordability is the largest barrier to uptake of mobile services in Malawi with device costs contributing to this.
To address the barriers it will phase out the 10 percent excise on data and text package purchases and phase out Malawi Communications Regulatory Authority’s (Macra) 3.5 percent tax on Information Communication Technology provider turnover.
The government also intends to establish a special purpose vehicle to build a Fibre backbone from Nacala to Lilongwe to reduce data costs.
TNM plc head of brand and marketing communications Louis Chipofya in a written response to questions on Wednesday said the company is pleased to note efforts to increase mobile penetration and, consequently, financial inclusion which he says can happen if the country has affordable devices and data costs.
“The current taxes are responsible for over a third of the total amount charged to customers on data, and directly passed on to the government. As such, taking out the 10 percent Excise Tax and the 3.5 percent Macra levy will automatically lead to a reduction in prices by over 12 percent.
“If Value Added Tax [VAT] too was to be scrapped off, the prices would automatically go down by 32 percent. The prices will further drop with reduction in the fibre costs through the proposed investment in fibre backbone, which shall of course depend on the pricing under the proposed special vehicle,” he said.
On her part Airtel Malawi plc Corporate Communications and Corporate Social Responsibility manager Nora Chavula- Chirwa said the company believes the plan will translate to increased access, service affordability, and internet penetration for Malawians.
“We cannot comment much at this stage, as the strategy is in formulation and stakeholder consultations are still underway but we look forward to its finalisation,” she said.
