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Telecommunication Companies under government radar

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Gospel Kazako

Government has indicated that telecommunication services in the country are expensive and must be reduced for the benefit of the people.

A recent snap survey conducted by The Daily Times has revealed that Malawians believe that interventions made by telecommunication companies have not improved the situation as regards internet costs and other telecommunication service charges.

Peter Mseteka based in Chimaliro, Mzuzu argued that there has been no change in data charges and civil society must help to amplify the voice of the people on telecommunication charges.

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Lilongwe based, Glory Masina, concurs with Mseteka adding that recently internet has become slow despite continued vanishing of data bundles.

In an earlier interview Minister of Information, Gospel Kazako, said telecommunication companies make huge profits up to 600 percent and their pricing structure must be reviewed.

“We are paying attention to complaints about depletion rate. Depletion rate is about billing per second or per minute. They need to assure us it is the same as in other countries meanwhile, we are of the view that data is extremely expensive and our people ‘for a long’ have been abused and taken advantage of,” Kazako said.

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TNM plc Head of Brand and Marketing Communications, Louis Chipofya, said the company’s pricing is not beyond reach but it is structured according to the operating environment.

He gave an example that the effective rate for a Smart 10GB bundle (10,240MBs) that costs K15,500 valid for 31 days is K1.51 per MB.

“…on that K1.51, besides a 10 percent excise tax, 30 percent corporate tax on our profits and the city and district assemblies charge us rentals for hosting our towers in the cities. Macra has a levy for $0.08 per minute for our international traffic on the same margin, as if that is not enough, we pay Macra frequency fees for voice and data services. Now, from that K1.51, how much do you think would be our take-home?

“Be mindful again that we are a listed company on the Malawi Stock Exchange and as such we are bound to share our little profits with our shareholders, I can give you our data charges structure from where you can see that the effective rate for some of our bundles is K0.98 per MB,” Chipofya said.

Airtel Malawi plc Public Relations, Communications and Corporate Social Responsibility Manager, Norah Chavula-Chirwa, added that government must review taxes on telecommunication services.

“We believe that we have done our part as a mobile telco provider, and are of the view that if the government could consider reviewing the current taxes on data, this would significantly bring down the cost of data further and also increase its benefit for a lot of Malawians as well as help bridge the digital divide,” Chirwa said.

Recently the ICT Association of Malawi (ICTAM) said it expects parliament to discuss taxes on internet services during the next parliament meeting expected to start this week.

This follows a spate of calls from the public for the country’s two main telecommunication companies, to reduce the cost of data.

A 2018 report dubbed Freedom on the net, indicates that Malawians have to pay up to 44 percent in tax in order to access the Internet.

The tax is broken down into; a 17.5 percent VAT [value added tax] on mobile phones and services; a 16.5 percent VAT on Internet services; and an additional 10 percent excise duty on mobile phone text messages and Internet data transfers, introduced in 2015.

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