Malawi - Telecoms, Mobile and Broadband - Statistics and Analyses

Executive summary

Malawi introduces converged licensing regime

Malawi is one of the world’s least developed and poorest countries, beset in recent years by declining GDP growth, high inflation, and a rapidly depreciating currency. To add to these difficulties the country has one of the highest HIV rates in the world. Telcos have been affected by currency devaluation, which has delayed their ability to fund network upgrades. In addition, the government in mid-2013 instituted a tax on internet services, the additional cost of services being passed on to consumers.

Mobile penetration remains very low in comparison to the African average. This allows for considerable opportunities for further growth. The market remains a duopoly between Bharti Airtel (formerly Zain) and Telecom Networks Malawi (TNM), given the failure of G-Mobile and Celcom Malawi to launch services. However, there is expectation that Lacell Private will launch services (under the Smart Mobile brand) by the end of 2016. This could provide the required impetus to the market, and lead to a welcome fall in end-user prices.

To encourage additional market competition, the government has followed in the footsteps of several of its neighbours and introduced a converged licensing regime which allows the two fixed-line operators, Malawi Telecommunications (MTL) and Access Communications (ACL) to enter the mobile market as well. The converged licensing regime was revised and came into force in September 2016.

The internet sector is reasonably competitive with about 50 licensed ISPs, though the limited availability and high cost of international bandwidth has held back growth and kept broadband access prices among the highest in the region. DSL services are available, and several ISPs continue to extend their WiMAX wireless broadband footprints. The two incumbent mobile networks have launched third generation (3G) mobile services based on UMTS/HSPA technology, while Telekom Networks Malawi (TNM) has invested in LTE infrastructure.

A national fibre backbone is being implemented, and the country recently gained access to international submarine fibre optic cables for the first time when a transit link via neighbouring countries was completed. Provided a suitable regulatory regime is put in place, this will bring down the cost of international bandwidth and deliver a boost to the broadband market.

Key developments:

• World Bank provides $72.4 million to help Malawi engage in the digital economy;
• Regulators of Zambia and Malawi sign MoU related to cooperative efforts in the telecom and broadcasting sectors;
• TNM boasts 13% growth in mobile subscriber base for 2016;
• TNM launches LTE services, plans to invest $30 million in LTE infrastructure during 2017;
• Government injects $23 million to kick-start the National Fibre Backbone Project;
• MTL to end the provision of CDMA and WiMAX services by the end of 2017;
• Regulator revises licence regime under a new Converged Licensing Framework (CLF), running to August 2017;
• Airtel Malawi partners Afrocoin Mobile Money to facilitate money transfers;
• Regulator develops Universal Access Fund (UAF) to deliver mobile services to rural areas;
• SIM card registration takes effect;
• Broadband plan developed with ITU technical assistance;
• TNM reports nearly one million users of its Mpamba m-money service;
• White space spectrum trials to increase broadband availability;
• SimbaNeET contracted to build and operate a fibre-optic cable linking Lilongwe with Tanzania;
• Report updates include recent market developments, operator data to Q4 2016.

Market penetration rates in Malawi’s telecoms sector – 2016 (e)

Companies mentioned in this report:

Malawi Telecommunications (MTL), Access Communications (ACL), Bharti Airtel (Zain, Celtel), Telekom Networks Malawi (TNM), G-Mobile (GAIN), Celcom, ESCOM, MalawiNet, MTL Online, Skyband, Globe Internet, Broadmax, Burco.

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