Last year Telekom Networks Malawi (TNM) invested MK31.5-billion (about US$39-million) in telecommunications infrastructure development as part of an ongoing effort to digitally transform and strengthen operations.

TNM board chairman George Partridge said the penetration of telecommunications services in the country stands at 48%, which is low in comparison with other markets.

He added: “The smartphone penetration in the country is very low but growing at a faster rate of more than 240% since 2018 and we still have 55% of Malawi’s adult population which does not have access to financial services of any kind. This means that the potential of growth of our business is still enormous.”

According to Partridge, the company predicts that the macro-economic environment will remain challenging in 2021 and put more pressure on the business and revenue due to the volatile exchange rate and the ongoing impact of COVID-19.

He said the company’s net profit has been in decline since 2019 thereby affecting dividend payment to shareholders.

However, the company anticipates that there will be a surplus in the maize harvest that will result in food security and empower rural subscribers with disposable income that could be spent on telecommunications services.

Last year, civil rights organisations, including the Collaboration on International ICT Policy for East and Southern Africa, blamed the country’s low smartphone penetration on the 17.5% VAT applied to mobile phone sales introduced in 2015.