TNM faults licence renewal procedures, urges Malawi regulator to change approach

Telekom Networks Malawi Limited (TNM) has faulted Malawi Communications Act and operating licence for lacking procedures to govern licences’ renewal and process as is the case with other jurisdictions.

TNM’s stance comes at the time it is waiting for the renewal of its licence for the second time which expires on 26thAugust, 2014.

TNM Head of Division, Marketing, Sobhuza Ngwenya, in a statement made available to Nyasa Times, noted that conditions for licence renewal were loosely drafted as principles and procedures for renewal are usually fixed in the telecommunication legislation or regulatory instruments.

“Nevertheless, in many developing countries such as Malawi, there is a tendency to leave the renewal process to the discretion of the licensing authority without providing any details on the terms, criteria and conditions for renewal. A sample study of mobile licenses shows that conditions for renewal are loosely drafted,” Ngwenya noted.

Ngwenya : es
Ngwenya :  Calls for change of procedures

Ngwenya cited lack of details provision pertaining to licence renewal or reissuance, which is a prerequisite for attracting potential investors, as well as failure by licensing authority to specify approach to be taken in assessing the original licence to be renewed as some of the shortfalls.

He said there was a need for legal and regulatory regime to have general guidelines to follow when the regulator (or other authority) is entitled to vary the terms and conditions of a renewed license.

“Given the risks to ongoing investment in the sector, licensing authorities should determine their approach to licence renewal as early as possible. Even within 5 years of the expiry of the mobile licence, an operator may not be able to recover even smaller scale network investments within the remaining licence period and hence may put off investing until receiving greater certainty over their future rights,” Ngwenya explained.

Ngwenya said they have since requested MACRA to follow principles and processes to ensure an open, transparent and consultative renewal exercise, adding there was a need for public consultation, which will help to engage stakeholders in decision making process as it strengthens perception of a transparent licence renewal process.

“As much as possible, TNM would prefer that both government and MACRA strive to promote investor confidence and give incentives for long term investment. This may be achieved by favoring principle of renewal expectancy or presumption of renewal, but also by promoting regulatory certainty and predictability through a fair, transparent and participatory renewal process”.

Ngwenya has then urged MACRA to institute public consultation procedures and guaranteeing the right to appeal regulatory decisions, which will maximize the prospects for a successful renewal process.

“TNM’s business plans are built upon current licence terms and conditions, therefore, any material changes to these conditions shall have a major impact on pricing of the company’s products and services. The Malawi Government should have a stable and predictable licence renewal regime in place and avoid handling such situations on an ad-hoc basis.

“This approach will encourage mobile operators to develop and implements seamless investment plans for timely technology upgrades and service developments in line with market demand thereby fueling economic growth and improving social welfare”.

But government in response said the issue concerns the law, therefore it would ensure the raised concerns are addressed.

Minister of Information, Moses Kunkuyu told Nyasa Times in an interview that while government was waiting for official communication from TNM, the matter would have been different if MACRA was contravening the law.

“If MACRA is operating within the law, then that’s no problem. The only issue we have to deal with here is to look into the concerns raised by TNM of which am not yet served, and see how we can deal with them. As government we will ensure that such concerns are looked into with urgency they deserve,” said Kunkuyu.

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