All data are collected in the Fiscal Year of 2008-2009.

Malawi / Telecommunications

Zain is an emerging telecoms player operating in 24 countries in the Middle East and Africa, serving over 69,5 million active customers. The company is the leading mobile telecom operator in 14 of its markets, while 5 are in second position. It is the 4th largest mobile network in the world in terms of geographical spread.

Zain (formerly MTC) was established in 1983 in Kuwait as the region’s first mobile operator. On 8 September 2007 MTC Group announced it had re-branded to Zain which became the Group’s corporate master brand.

Zain Malawi started its operation in October 1999 as Celtel-it changed its name to Zain Malawi in 2008. Population coverage stood at 90 percent and geographical coverage at 72 percent in 2009 with over 1 million subscribers.

In 2008 Zain re-branded its entire African operations from Celtel to Zain. The move coincides with the linking of the world’s first borderless mobile service ‘One Network’ across two continents.

Zain has won a number of awards. Most recently, Zain was awarded the CBC African Business Award 2008 for the “Best Telecoms’ Company in Africa”. In September 2007, the Group won three prestigious industry awards including Overall Operator of the Year at the second annual CommsMEA telecom awards for the Middle East and Africa. It also won New Telecoms Service of the Year for One Network while Group CEO Dr. Saad Al Barrak received a Lifetime Achievement award for his pioneering efforts in the industry.

Mwai House, Independence road, City Centre, Lilongwe; Tel: +265 (0) 1 774 800, +265 (9) 9 971 586/587/588/589/590; Fax: +265 (0) 1 774 802/803

Blantyre Office:

Zain House, Raynor Avenue, Limbe, Blantyre; Tel: +265 (0) 1 844022; Fax: +265 (0) 1 844745

Zain Malawi services, include: mobile phone services; Prepaid plans; International roaming; Local and international text messages; 24-hour customer care centre; Internet connections; Email services.

250 employees in Malawi
16,000 worldwide

Zain worldwide

Revenues: US$ 4,01 billion; EBITDA: US$ 1,77 billion; Net Income: US$ 534 million in H1-2009.

Consolidated financial results for the year ended 31 December 2008: Consolidated Revenues: US$ 7,44 billion; EBITDA: US$ 2,78 billion; Net Income: US$ 1,2 billion

The Mobile World subscriber database estimates that Malawi ended Q1 '09 with just over 2 million subscribers - representing a population penetration level of just 15 percent. Zain is the market leader with 71 percent of the customer base, with Telecom Networks Malawi (TNM) taking the remainder.

“Become one of the top 10 mobile telecommunications companies in the world; US$ 6 billion in EBITDA; Reach a customer base of 150 million; Become a truly multinational organization and management team”.

“The corporate strategy of Zain is ACE. It was developed to guide our organization towards becoming a global mobile telecommunications company. At the beginning of 2003, Zain started its ambitious expansion journey, labelled the “3x3x3” journey. Through this 9-year journey, Zain would expand, in 3-year intervals, from being a local mobile operator, to becoming a regional then a global force in its industry.

This ambitious growth vision is the driving force behind Zain’s expansion from a local operator serving the Kuwaiti market at the beginning of 2003 to a company with a commercial presence in 24 countries by 31 May 2009.

ACE is an acronym that stands for Accelerate, Consolidate, and Expand. These are the three pillars of Zain’s growth formula. Through ACE’s strategic initiatives Zain will: accelerate the growth of its family; expanding its reach organically and inorganically; consolidate its strengths; achieving ultimate efficiency in value creation; expand its relationships with its customers; satisfying more of its customers’ needs and enhancing their lifestyle.

ACE’s Drive11 Program

In 2009, Zain announced a strategic program on its ACE agenda, named ‘Drive11’, which will enable it to adopt the best-suited business models to sustain its expansion, particularly in the many high-growth markets that it serves. As a result, Zain will put increased focus on customer-facing functions and will enhance its control on other functions by centralizing them or by outsourcing them to strategic partners.

This program comes at a vital stage of the company’s expansion vision. It will maximize economies of scale and realize significant efficiencies, providing the company with the necessary thrust to capture the large growth potential in the markets in which it operates.”

Zain Malawi is 100 percent owned by Zain International

Before reform, the Malawi Post and Telecommunications Corporation (MPTC) dominated the ICT sector. However, this domination changed with the passing of the 1998 Communications Sector Act. The new law ended the MPTC monopoly as it was split into two companies: the Malawi Telecommunications Limited (MTL) and Malawi Post Corporation (MPC). A new independent regulator, the Malawi Communications Regulatory Authority (MACRA) was also established. It remains the only institution responsible for regulating all aspect of communications. Although technically an independent regulatory body, the board of MACRA is directly appointed by the government.

Unlike the fixed-line services, the cellular sub-industry has been relatively competitive, thanks to the government’s policy of issuing additional licences to new cellular providers. In July 2008 MACRA awarded Global Advanced Integrated Networks (GAIN) a third mobile licence. It appears that the government policy of removing import duties on mobile phone handsets and telecommunications equipment in May 2008 has also had a positive impact on attracting new players into the market.

In 2009 a dispute developed between Macra and Zain over plans to lower phone tariffs in the country. The regulator wants to open the market up to more networks, while Zain blames high taxes and says increased subscribers would lead to lower tariffs.

Telecommunication services providers including Zain is also dissatisfied with the conditions MACRA have put in the operating licence granted to GAIN. Zain Malawi said they have noted that GAIN will be paying an annual levy equal to 2 percent in the first and second years, 3 percent in the third year, 4 percent the fourth and 5 percent thereafter. This is contrary with what Zain Malawi pays which is a levy equal to 5 percent of audited net operating revenue for each year since they began their operations in the country.

MACRA has however, defended itself in the letters of 18 March 2009, addressed to TNM Limited, Zain Malawi and MTL saying they have loosened up the conditions as an incentive to allow new players in the field to compete effectively. However, Zain Malawi contends that before MACRA grants a licence it has to be satisfied with the financial position of a company and it is therefore not fair to give a company four years in which to prove its financial viability before it starts paying the standard rate of 5 percent of the net operating revenue.

In another development Zain Malawi has been accused of evading import taxes after a local newspaper found that import declarations were being changed without notifying the customs officials. The Nyasa Times reported that a shipment claimed to be network switching equipment was substituted for air conditioning units, which are subject to import taxes. Zain officials agreed that there was breach of taxation procedures and the company agreed to pay MRA MK4,7 million [around US$34 000] for the goods.

Zain Malawi had invested US$100 million in the country over the past two years alone to upgrade and improve the quality of its network.

The network in 2009 launched the Zain “hotspot” which enables its subscribers to access internet anywhere the company has network coverage. According to the company’s Marketing Director Enwell Kadango, the hotspot is part of the General Packet Radio Service (GPRS) which allows its customers to send and receive data across mobile network. Zain launched the GPRS in 2007; in August 2009 Zain Malawi launched ‘Kodo-Kodo phone’, a new sim-operated payphone Equatel G S-300 series; 43 new sites were rolled-out in H1-2009, bringing the total number of sites on air to 305 sites; it entered into a three-year long partnership agreement with Malawi's National Media Institute of Southern Africa (NAMISA) to annually sponsor the management of some activities to mark World Press Freedom Day; in April 2009 Zain Malawi raised the cost of its low cost ZTE and Huawei handsets which were at K1,499 to K3,499; and in May 2009 Zain Malawi, Emitac Mobile Solutions (EMS) and Research In Motion (RIM) launched the BlackBerry solution in Malawi. The BlackBerry solution brings together smartphones, software and services to allow easy wireless access to email, phone, calendar, web, multimedia and other business and lifestyle applications.

Zain is currently finalising discussions with the Malawi Communications Authority on plans to introduce 3G technology in the country.