TNM MALAWI LIMITED3
History and reforms in Malawi telecommunication sector3
TNM’s Business operations and markets6
Competition in telecommunication industry6
TNM’s strategy for growth7
OVERALL RESEARCH APPROACH8
Chart 1: Shareholding ratio of TNM Limited5
Table 1: subscriber and market share (source: TNM 2010 Annual Report)7
The research title is “an evaluation of the business and financial performance of TNM Limited for the years 1 January 2008 to 31 December 2010”. The research was conducted to feedback to the Government of Malawi on the outcome of a privatised market and also to provide results to prospective investors that can assist them to make an informed decision as to whether this new industry can provide them high and stable returns to their investment.
TNM Limited (TNM) was selected as choice of company as it is the first company to be incorporated after the regularisation of the telecommunication industry. The comparative company, Airtel is a private company, a subsidiary company of Bharti Airtel, India.
TNM financial statements are presented in Malawi Kwacha, which is the company's functional currency and the official currency of the Republic of Malawi. All numbers in the tables of this research paper are listed in billions.
The Malawi Kwacha exchange rate to the United States Dollars is MK151.63/US$1.00. (Malawi Economic Review, 2010, 4th Qtre)
TNM MALAWI LIMITED
History and reforms in Malawi telecommunication sector
The telecommunications and postal services within Malawi were operated by the Government through a state-owned corporation, Malawi Posts and Telecommunications Corporation.
However, in 1994, the Government embarked on a radical economic reform and adopted a policy of economy liberalisation. As a result, Government divested its interest from the telecommunications sector and confined itself to producing a national policy for the regulation of communications services. This provided for the separation of the provision of telecommunications from postal services.
In 1995, Telekoms Networks (now known as TNM), was incorporated to provide Global System for Mobile (GSM) services. GSM is a second generation, cellular, digital mobile phone system. (www.mobile-phone-directory.org). The postal and fixed telecommunications services component operated under a private limited company, Malawi Telecommunications Limited. (TNM Prospectus, 2008).
Under the new policy, The Government also set up a telecommunications regulator, Malawi Communications Regulatory Authority (MACRA).
Competition only began in 1999 when MACRA awarded a second mobile service license to Celtel Limited (now operating as Airtel).
A third licence was offered in 2008 to Global Network but until 2010 it has not commenced operations.
TNM was incorporated under the Malawi Companies Act, 1984. The history of TNM is characterized by joint ventures and transfers of net assets in accordance with the Communications Act of 1998.
TNM shareholding is indicated in Chart 1, below:
Chart 1: Shareholding ratio of TNM Limited
Source: TNM 2008 Prospectus
TNM is authorised to provide mobile radiotelephony services in Malawi, for a period of 15 years, from 1999. This service includes voice telephony, facsimile, data communication (including internet), international and national long-distance telecommunication services and value-added services.
One of TNM’s key accomplishments was in 2008 when it listed on the Malawi Stock Exchange. This was the biggest initial public offering (IPO) in the history of Malawi, with over 1 billion shares offered to the public. It was also Malawi’s first telecommunication company to list....