If you are Malawian and you are on social media, then you know about the datamustfall protest. Malawians of all walks of life, including the Minister of Information, Mr. Gospel Kazako, have come out to demand that TNM and Airtel must reduce their charges of their internet services.
The logic of the argument goes as follows: The exorbitant profits TNM and Airtel make imply the prices the two companies charge are exploitative. One of the supposed evidence in support of this claim came in the form of a tweet by a user who goes by Kon_Man, that compares profits and numbers of subscribers of among Airtel Malawi, Airtel Tanzania, and Airtel Zambia.
Feeling pressure from the government and the public, on July 24th, 2020, TNM came out and reduced the price of its pay as you go internet by 70%. This move has only served to invigorate the #datamustfall campaign as it seems to show that prices of data in the country are indeed inordinately high.
Social Media: A Weapon in the Fight for Reduced Data Prices
Being a consumer, there is a big part of me that wants to jump on the bandwagon and yell “data must fall!” However, the curiosity in me felt the need to take a closer look at the the arguments I have come across on the campaign.
Initially, I felt there was too much emphasis being put on the profits Airtel made in only one year. Logically, it is folly to make conclusions based on singular observations.
So I took it upon myself to do my own search to see what I could find on this subject. My intention was not to dispute or to enhance a particular side, but rather to be as objective as I possibly could be.
Inspired by the tweet by Kon_Man, I started my quest by looking at the 2019 financial reports of Airtel subsidiaries in Malawi, Tanzania, and Zambia. The first thing that jumped out to me was that the profits for Airtel Malawi and Airtel Zambia that are in that viral tweet are not quite accurate.
After converting local currency after tax profits into dollars using estimates of the exchange rates at the end of the year, I got the following numbers: US$ 21.6 million for Airtel Malawi; US$ 15.6 million for Airtel Tanzania; and US$ 1.1 million for Airtel Zambia. This shows Airtel Malawi made a lot more profits than is indicated in Kon_Man’s viral tweet.
But does this prove Airtel Malawi is indeed “stealing” from its customers? Like I alluded to above, it is not sufficient to make conclusions based on profits from a single year. So I compared the profits in 2019 to those in 2018.
In the 2018, Airtel Tanzania made a loss of a whopping US$ 13.9 million, Airtel Malawi made profits of about US$ 3.0 million, while Airtel Zambia made a profit of US$ 5.4 million.
This suggests that the huge profits Airtel Malawi made last year were an anomaly that could possibly be explained by a one-time seismic increase in demand for the services of company that came about because of the 2019 general elections.
As we all know, those elections were the first in the history of the country whereby candidates heavily utilized social media to campaign.
Before I could totally convince myself of that line of thought, I decided to look at the profits TNM made in those two years. In 2019 the company made profits of US$ 20.4 million whereas in 2018 its profits were US$ 21.5 million. With that in mind, it seems profits of around US$ 20 million are the norm for our two mobile services providers. As to whether such profits can be considered to be too much, I do not know.
I only have questions: What levels of profit are appropriate? How does one come to that conclusion? I doubt think there is a right answer for either of those questions.
But if you do have answers, keep in mind that the fact that we only have two players on the market, which means that profits in this country will always be higher than those enjoyed in our neighboring countries where competition is higher.
It is not a crime to make colossal profits. In fact, as a consumer, I should be happy to see a company make profits as, among other reasons, it shows the market is viable, which attracts other players to enter.
So why are new mobile service providers yet to enter the Malawian market? One possibility is that TNM and Airtel have been colluding in efforts to keep po- tential entrants from joining the market.
However, I do not have any information in support of such a chain of thought. What I know, though, is the country has a regulatory body in the Malawi Communications Regulatory Authority (MACRA) whose job is to ensure that such things do not happen.
That brings to my next point; why is no one putting any pressure on the Malawi Commu- nications Regulatory Authority (MACRA) and on indeed the government to explain to us, the people, their role in this whole issue.
As a regulator, where was MACRA when TNM was charging the prices it has now slashed? Is there any kind of collusion going on between these two companies? What is the organization going to do on this issue going forward? And why is it that we have not seen new players join the market in all these years?
Also, what will the government do on the policy side to ensure that both buyers and sellers in the mobile services market are satisfied? Of course, TNM must also explain how it could cut the price of its pay as you go data by that much this quickly.
Furthermore, it, and indeed Airtel, must also justify the prices of airtime and data bundles that it is currently charging. Adequately communicating with their customers is the least the that these companies could do at the moment.
Opinion by: Angumanga