“An increasing contribution from data, TNM Mpamba and Enterprise services in aggregate accounting for 23% of total revenues (up from 18%) reflects the transformation of our business so far”

Net profit for Telekom Networks Malawi Plc rose 27 percent to K16.6 billion in 2018, the company’s published financials showed on Friday.

It attributed the profit to strong growth in revenues, cost control and a stable macro-economic environment.

In recent years, voice (GSM) business has contributed close to 80 percent of the company’s profitability while 20% has derived from data and mobile money.

But the mobile network and ICT services operator told shareholders to its 24th Annual General Meeting at the new Amaryllis Hotel in Blantyre Thursday it is drifting towards becoming a mobile data-driven business.

Responding to a shareholder from Mpemba in Blantyre who queried why TNM’s voice rates appeared lower than those of Airtel, and why the company was not adjusting them upwards to ensure it maintains profitability, Chairman George Partridge said this model was changing.

“That will change. We expect the business to be driven more by data than voice in the longer term,” he said.

The TNM published report shows that overall revenue grew by 15% to MWK91.18 billion in 2018, up from MWK79.59 billion in 2017, driven mainly by voice business, followed by data.

GSM Voice business contributed 76.1% to revenue, followed by data at 15.4%, mobile money (Mpamba) at 4.3 percent and enterprise services 4.2 percent. Voice revenue grew 10% to MWK67.7 billion from MWK61.33 billion.

“An increasing contribution from data, TNM Mpamba and Enterprise services in aggregate accounting for 23% of total revenues (up from 18%) reflects the transformation of our business so far,” reads the report.

In the published annual report Partridge says TNM’s evolution into a data business is supported by substantial investments in upgrades of its 4G network, which reached K19.31 billion in 2018 up from MWK15.84 billion in 2017.

“TNM’s evolution from a mobile telecommunications company to a customer centric ICT and multimedia company has been steadily gaining momentum,” he says in the report. He says the 4G platform, which TNM pioneered in 2017, remains a key market differentiator.

The annual report also notes that following an upgrade of TNM’s mobile money business Mpamba—modelled on Kenya Safaricom’s famous M-pesa—customer base has grown strongly with attributable revenues increasing by 54% year-on-year.

“The service is now available across the country and we continue to recruit more agents, billers and merchants to increase the depth of distribution and use of the service,” reads the report.

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