Updated: The title of the article was updated after Airtel complained to our editors that the statement was a collective one comprising Airtel, Access, MTL and TNM. The Title has now been modified to include all four carriers in the country. As to the Clarity of the statement which we find rumbling rather than taking the issue head-on we leave it to the Malawi mobile users to make their own judgements. The full Press statement Below:
Full Statement
Our attention has been drawn to an article headlined ‘’Malawi’s expensive phone habit” by BBC’s Lilongwe Correspondent, Emmanuel Igunza. The main thrust of the article is that Malawi is one of the most expensive countries in the world to use a mobile phone services. The BBC report has also been picked published by a few publications and blogs in Malawi. According to the writer, the conclusion is based on a report presented by the International Telecommunications Union (ITU) regional consultant Andrew Dymond.
It is our contention that the writer used the information selectively in order to sensationalize the report without counter-checking the information on the ground. One of the key disclaimers that the author of a report (commissioned by MACRA) states upfront is that the methodology used for the previous global report is dependent on static published tariffs and therefore does not take into consideration dynamic discounted rates that are typical of the Telco industry across Africa. In reality, Malawi mobile phone users enjoy much lower effective tariffs rates than those propelled in the reports published by the ITU. The report explicitly states; “For example, whereas the average prime time on-net calling tariff in Malawi is currently MK72.00, the average rate paid by customers is actually between MK18.00 and MK27.00, i.e., between 25-37% of the maximum tariff”.
Globally, headline or rack rates for services such as telecoms, airlines and hotels are not usually what the consumer actually pays. However, the effective rates that consumers actually pay are much lower. Any study using rack rates would then not provide an empirical accurate finding based on the reality on the ground. It is based on this reason that the researcher commissioned by MACRA further qualified his statement thus; “As a result, Malawi customers’ average revenue per user (ARPU) ranges between 1,000-1,500 MK ($2-$3) per month, not $12-15 as indicated by the basket methodology”. The report further mentions that Malawi’s effective prices are not high by regional standards, but may be below average. Statistically, the aforementioned disclaimers and methodology would have an impact on the purported Malawi’s mobile retail rates in comparison with other countries in the region. This therefore fundamentally challenges the accuracy of the report that formed the basis of the BBC report. We would therefore ask that the writer reviews the story and offers a fair assessment of the pricing context on the ground.
As industry players, we are committed to continue using the discount and promotional approach, which has received positive uptake by consumers especially in rural areas. Competitive discounts and promotions provide a self-regulation mechanism on pricing that ultimately benefits Malawian consumers of mobile services.
Moreover, jointly and individually the telecom industry in the last decade has made significant capital investments exceeding several hundreds of millions of US Dollars into Malawi and will continue to do so in the future. These substantial investments into the modernization of the communication infrastructure of Malawi are a vital contribution to the competitiveness of the country. The industry has done this and continues to do so despite the comparatively high cost of doing business in Malawi because we believe that this will contribute to the development of the country as a whole and over time.
