On May 20 2021, Thyolo Central Member of Parliament Ben Phiri moved a data bundle motion in the Malawian ‘Knesset’. The motion seeks to move the Executive arm of government to goad internet service providers (ISPs) into removing expiry dates on data bundles.
Is this going to happen? Maybe. Internet service providers will do whatever is possible to slow-walk the process. Malawi’s internet penetration rate is 13 percent; there are very few customers that buy internet bundles. It, therefore, makes business-sense for ISPs to find creative ways of making the fewer customers buy bundles frequently.
In business, low markups are attainable where the turnover is massive. When the turnover is minimal, like in this case where our internet penetration is low, businesses resort to extortionate pricing mechanisms. Businesses are not charitable entities; they have to break even, whatever the case.
That said, businesses are also investment vehicles. In biblical terms, internet service providers must sow seeds. If the ISPs had started with lose-win lower prices at the beginning, they would have pushed our internet penetration to higher levels by now. The ISPs would have recovered their initial loses in the huge turnover that would have ensued. Sometimes, one has to lose in order to win.
Whilst that is on the upside, the downside is that ISPs do not have a government to run. The Malawian ‘Duma’ (where Ben Phiri is a member), the Executive and the Judiciary, collectively, have.
The Malawi Government has a duty to create laws and policies that deliberately create an enabling environment for businesses to flourish. It is the duty of the government to increase internet penetration in this country.
Countries like Kenya and Rwanda created policies that made smartphones and data cheaper luring the citizenry into using the internet more. These countries didn’t just wake up on day to find their internet penetrations up there in the sky.
One way to do this is through less punitive tax regime on data and internet devices. Currently, Malawi taxes data at 26.5 percent (16.5 percent VAT and 10 percent Excise). This is surely trying to squeeze blood out of tulips.
The internet is like a connection highway that lets you talk to other computers. ISPS open the tunnel for you. Initially ISPs charged for the time the connection was open for you; no matter what you did there.
That method was not fair because some abused the system, yet they paid the same amount that others who used it the least shelled out. While one only surfed the net, the other downloaded movies the whole month, day and night, causing congestion in the process.