MALAWI TELECOM SALE TO GO AHEAD AT US$30 MILLION AS ORIGINALLY PLANNED
The Malawi Privatisation Commission (PC) last Tuesday announced Malawi Telecommunications Limited (MTL) will be sold at $30 million. The figure falls short of the previous $30.7 million price which many people already described as “unrealistic.”
PC boss Maziko Sauti-Phiri said during a press briefing last Tuesday the new price had been reached after taking into consideration the companies assets and liabilities.As at the end of last year MTL’s net assets were valued at K4.4 billion.Sauti-Phiri said K1.335 billion of the total sum will accrue to government while K2.225 billion will be invested into the company. Government on Friday last week nodded to the sale of 80 percent of MTL shares to an investment vehicle called Telecom Holdings Limited (THL) which is led by Press Corporations Limited (PCL) which has 65.4 percent stakes followed by Old Mutual Malawi with 25.1 percent.
In addition to the purchase price, THL is expected to inherit K3.150 billion debt and immediately pay K1 billion to cater for staff retrenchment. PCL boss Matthews Chikaonda said that for quite some time MTL has been failing to meet its target of increasing access to telecommunication services to many Malawians.
“People have been arguing that MTL has been doing fine when in actual fact the company has failed to meet the targets it had agreed with the Malawi Communications Regulatory Authority (Macra),” said Chikaonda. He said MTL had agreed with Macra in 2000 to supply 40, 000 additional telephone lines by December 2004 and that it has not been met the target. “Had it been that MTL was to fulfil what it had agreed with Macra, whatever they have been posting as profits would have been reduced to zero,” he said. He added that Malawians need to give them (THL) about two years and if in those years they don’t deliver they should be kicked out.
The THL consortium expects to raise the number of fixed lines from the current 57,000 to 84,000 in its first year and then to 104,000 in the second year. The consortium will be expected to pay a fine of $500 for every line they fail to provide in the urban areas and $1,000 for target failure in the rural areas. As of last Tuesday evening former MTL board chairman Ken Msonda was trying to obtain an injunction restraining government from going ahead with the sale. President Bingu wa Mutharika had suspended the sale of the company in August to review some critical areas including the price which people felt could not match the current state of the company.