TNM paid govt K15bn in fees, taxes in 2014
TNM, the only Malawi Stock Exchange (MSE)-listed telecommunications firm, has said it paid K15 billion in levies, fees and taxes in 2014 to government through Malawi Communications Regulatory Authority (Macra).
The figure is one of the highest in Africa and contributes substantially to the cost of doing business, according to Willem Swart, the company’s managing director, who is also chairperson of Association of Telecoms Operators (Atol), a grouping of telecommunication companies in Malawi.
He said in a statement that out of an audited turnover of K40 billion in the year ended December 2014, whose results were released this week, TNM’s returned net profit after tax is K5.2 billion, which is disproportionate to the K15 billion fees to government.
Swart said while TNM is committed to the economic development of Malawi, the company is worried about its future profitability and sustainability because of the prevailing high cost of doing business.
“The profits of our company directly come from our subscribers and, we therefore, have the responsibility to use these funds in the most effective way possible, which will support the future growth of the company and the economy,” he said.
Swart said TNM, as one of the major corporate citizens in the country, has the duty to support activities, which will develop the information and communications technology (ICT) industry for the long-term benefit of the people of Malawi, but also “to oppose any actions which would destruct value and the ability of the company to invest on a sustainable basis in infrastructure for the future”.
Recently, due to the high cost of regulatory obligations, TNM hiked its call tariffs by 14 percent, which is way below inflation currently at 19.7 percent, but Macra decreed against the hike, saying the regulatory body has a duty to promote investment and competition in the industry.
Macra director general Andrew Kumbatira said they have a duty to protect the interest of consumers in relation to the prices charged for telecommunication services.
“The prices must reflect the trust cost of offering services,” he said in a letter rejecting TNM’s tariff hike.
However, the situation raised concern in the broader telecoms industry and it came after a study commissioned by Macra, which showed that Malawi has one of the highest call tariffs in the world, suggestions Atol said were inaccurate.
Swart said Malawi’s monthly average revenue per user (Arpu) for 2014 was K 1 451 ($3.2) and not K5 441 ($12) as was reported in the study.
He said at $3.2, Malawi’s Arpu represents one of the lowest in Africa.
Swart said in 2014, the company sold over 642 million minutes on its network at a price below K20 per minute.
He said the market for telecommunications in Malawi is small and does not support “extravagant investment in infrastructure” if any operator has to pay returns to shareholders and repay loans at high interest rates.
“[In comparison], Nigeria has achieved 183 million subscribers this month and, in Malawi, we now have approximately five to six million active subscribers.
“A small market can only support smaller operators and networks and the need for development and affordability must always be balanced. It is, therefore, important for us to use the revenue we receive from our customers, in the most effective way possible,” said Swart.
Earlier this year, research by senior telecommunications economist and policy strategist Andrew Dymond showed that the cost of mobile telephone services in Malawi is high and proposed an introduction of a third and perhaps a forth GSM mobile operator to break the market co-dominance that exists in the sector
International Telecommunications Union (ITU) in a recent report said Malawi is one of the most expensive countries in the world to use mobile phone service. n
