We Are Committed to Helping Companies Play by The Rules

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With a population of over 18 Million, Malawi remains a very viable market for telecom operators in Africa. According to a 2017 report by ITU, internet penetration stands at 3.9%, with about 1,758,503 Internet users as of June, 2017, accounting for 9.6% of the population.

In this exclusive Interview with African Leadership Magazine, the Chief Executive Officer, Malawi Communications Regulatory Authority, MACRA, Mr. Godfrey Itaye, talks about the agency’s efforts towards providing the necessary framework to help companies play by the rules. Excerpts:

Telecommunication in Malawi has not been without the known challenges in other countries. As a regulatory agency, what are the standard requirements (benchmark) for operation in the country?

  • Effective policy and regulatory framework

Malawi has a National ICT Policy that came into force in 2013. However, due to the dynamism of the communications sector it is due for review.

Malawi recently enacted the Communications Act 2016 and the E-transactions and cyber-security Act 2016 which govern operations of MACRA

  • Effective regulations in place

Since the Acts (laws) are broad in nature there is need to come up with subsidiary legislations to effectively regulate the market

  • Evidence based statistics and determinations

As a regulator we will be required to make determinations over the industry and as such we need to carry out studies to ascertain what is obtained on the ground to aid in decision making. Through market surveys, statistics submitted by operators can be verified.

6 million mobile network subscribers, what areas are your agency (MACRA) looking at exploring to increase market penetration?

  • Converged licensing framework

MACRA has changed the licensing framework from unified licensing to converged licensing framework (CLF) by bringing in more licensing categories thereby removing entry barriers and, in the process, encouraging investment and competition in the sector. The CLF has four categories of licenses which operators can apply and operate. These categories are: (i) Network Facilities; (ii) Network Services; (iii) Application Services; and (iv)Content Services.

CLF has also introduced smaller categories of license like regions and districts to allow small players to also have an opportunity of competing on the market.

  • Spectrum reframing

MACRA came up with the spectrum pricing model that discourages spectrum hording. It also aims at encouraging licenses/ operators to roll- out to the rural areas by making spectrum price for the less congested areas to be less expensive compared to the urban areas.

  • Infrastructure sharing

MACRA is also encouraging operators in the telecommunication services to share or lease infrastructure as a way of reducing capital expenditure thereby making the operators to focus on their core business, e.g. application services.

  • USF

Communications Act 2016 has mandated MACRA to establish Universal Access Fund which will see deployment of telecommunication infrastructure in the rural and underserved areas

MACRA carried out a cost of doing business study which has come up with different cost models and it is more likely going to push the cost of services downwards. Already interconnection rate has gone down by half.

The Malawi Communication Regulatory Authority (MACRA) announced a tariff decrease from 1st January, 2018, saying it will start reducing calling rates in order for people to make phone calls at affordable prices in the country. Has this been duly enforced?

Yes, all 4 telecommunication operators (voice) are implementing the directive. We are monitoring to see if retail tariffs will follow the reduction in wholesale rates.

In 2014, a study was carried out on the Access to and Use of Information Communication Technology (ICT) in Malawian Households. What were the findings, and how effective have the adopted measures been to help with that?

Affordability of ICT services and products

Mainly voice and data services pricing were considered to be expensive by the majority of the respondents. Since the survey, MACRA embarked on studies to establish the cost of providing the services and has developed cost models that are being implemented now. Key intervention has been the reduction in interconnection rate from US$4 cents per minute to US$2 cents per minute for voice calls at wholesale rate in 2018 with a target of US$0.6 cents per minute in 2020. This will result in a reduction in the retail rates that the operators charge the customers as evidenced by latest reductions communicated by the operators.

Lack of access for telecommunications, broadcasting and postal services in some parts of the country

– MACRA has gone ahead to establish the USF and US projects/programs to address the gaps that exist in some parts of the country.

Lack of service availability – encouraging infrastructure sharing, CLF

Poor QoS – implementing CIRMS

Diversity in content broadcasting – MACRA is currently working on content development and regulation and has set aside a target of 60:40 for local to international content.

Postal services – high postal and courier penetration rate – MACRA has embarked on a postal agency renovation program in the current financial year as well as postcode and physical addressing program.

It should be highlighted this reduction is on the interconnection charges. This is the rate which one has to pay as an additional cost when he calls is made from one network to another.

As a regulatory body, it is common for telecommunication operators to default. Sometimes these defaults could grant competitive advantages in a fiercely competitive market. How does MACRA keep every operator in check?

Quarterly technical and QoS audits/ monitoring – MACRA carries out monitoring and enforcement of the findings made

License enforcement – Filing of regulatory information such as audited financial statements, QoS reports,

Malawi’s economy is primarily agricultural. Are there telecommunication policies that can liberate the agricultural sector to help woo investors to the farmers?

There are no telecommunication policies that specifically target the agricultural sector. Nevertheless, Malawi has a National ICT Policy of 2013 which recognizes the cross-cutting nature of ICTs in all aspects of the economy. Some of the strategies MACRA has employed to encourage investment in agriculture are:

Talking to telecoms operators to reduce their service cost to the users so that many farmers can advertise online

Identifying local innovations and exposing them to the global platform. Last year we showcased a local irrigation innovation in south Korea during the ITU Telecom World in Busan

MACRA will soon come up with ICT innovation awards that will target agriculture and other sectors

What is the future of telecommunications in your country, and what are MACRA’s outlined policies that will grab the headlines and attention of investors?

The telecommunication policies in place are driven by the Act and national development strategy. One of the objectives of Act is to remove unnecessary barriers to entry and attract investment in the communications sector (Section 2(b)). Further to this, the national development strategy, the Malawi Growth and Development Strategy emphasizes on the use of ICT services and products as catalyst for the development of other key sectors such as agriculture to spur economic development and growth in the country.

The Government policy has recognized the important roles of key initiatives such as the Universal Service Fund, Telecentre development project and digital financial services

Converged Licensing Framework which has removed barriers of entry to the market for new investors administrative Incentive spectrum pricing model

Digital financial services

MACRA is developing more regulations that will ensure effective regulation of the market

Establishment of cert that will ensure secure cyberspace

Congratulation Mr. Godfrey Itaye on your nomination for this meritorious award. What would you like to say about this global recognition?

I am truly honoured to be nominated for this prestigious award. I believe the event will motivate African leaders to do more in their endeavors and for me in particular, this is a great opportunity to showcase what African leaders can achieve given the right platform like mine.