Malawi’s expensive phone habit

One of the first things to strike a visitor to Malawi is the huge number of advertisements put up by mobile phone companies marketing their products.

“Muli bwanji? (How are you?)” reads one of the huge red billboards in the local language Chichewa.

Another colourful one shows the picture of a jet plane taking off, announcing cheaper call tariffs.

Everywhere you look across major towns in Malawi, you will see the attempt to entice consumers – from branding on umbrellas used by street vendors to T-shirts and even vans.

But mobile services are anything but low-priced in this country.

In fact, a report by the International Telecommunications Union (ITU) says on average Malawians use more than $12 (£7.70) a month on mobile phones.

This is more than half of what an ordinary Malawian earns in a month.

Mobile phones expenses relative to income

Cheapest:

• Macau, China – 0.11% of average monthly earnings
• Hong Kong, China – 0.18 % of average monthly earnings
• Denmark – 0.19% of average monthly earnings

Most expensive:

• Malawi – 56.29% of average monthly earnings
• Madagascar – 52.55% of average monthly earnings
• Central African Republic – 51.63% of average monthly earnings

Cheapest in Africa:

• Mauritius – 0.79% of average monthly earnings
• Tunisia – 1.62% of average monthly earnings
• Botswana – 1.64% of average monthly earnings

Source: ITU: Measuring the Information Society Report 2014

In neighbouring Mozambique, consumers spend just more than a quarter of their incomes using their mobile phones.

The figure in Kenya and South Africa is significantly lower, amounting to less than 5% of average monthly earnings.

This makes Malawi one of the most expensive countries in the world to use mobile phones.

Court battle

“We have been complaining for some time now that the rates are very high,” laments a consumer in the capital, Lilongwe.

“Now researchers have shown the evidence that indeed we are paying a lot,” he says.

In a bid to bring down the charges in the telecommunications sector, the Malawi Communications Regulatory Authority (Macra) has commissioned an independent survey to analyse market trends.

Part of the recommendations presented by the experts is to increase competition in the sector, currently dominated by two operators.

Marca’s Ben Chisonga says the government might have to intervene to bring down the tariffs.

“We are thinking of introducing more data players in the market,” he says.

“For the current players, we are thinking of reducing the interconnection rates, which are about four cents per minute, which we believe, is the highest in the continent.”

In 2008, a third mobile phone operator was licensed for business in Malawi, but since then it has been embroiled in a court battle with the government after delaying a roll out of services.

Meanwhile, charges for making calls from one network to another have remained high, meaning many people prefer to have two Sim cards.

“We know that because of this, the mobile phone penetration is not as high as the 11 million we had earlier estimated,” says Mr Chitsonga.

“It might be around two to three million.”

‘Very frustrating’

The lead researcher who conducted the survey on behalf of the regulator agrees with these figures.

“Tariff discounts appear to play a far greater role in Malawi than in other countries,” says Andrew Dymond, noting that more than 90% of calls are made to the same network.

“This means that Malawian users take excessive advantage of promotional discounts which are only usable for on-net [same network] calls,” he adds.

However, it is not just the cost of mobile services that is an issue in Malawi.

Many consumers also want the providers to give them value for their money by improving the quality of service they get.

“There are times when the services are very bad, even the internet is very slow, so it’s very frustrating,” a woman in Lilongwe told me.

“Sometimes you want to make a quick call but then you can’t get through, so those are some of the things that I think they need to improve,” she said.

But in order for the services to improve, the government says it needs to upgrade existing infrastructure, especially in rural areas.

The authorities admit this could take up to five years, meaning consumers will have to continue incurring high costs for some time to come.