Malawi Telecommunications Ltd. (MTL)

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In February 2006 the Privatisation Commission of the government of Malawi completed the sale of an 80% stake in fixed line operator Malawi Telecommunications Ltd (MTL). The stake was sold to private consortium Telecom Holdings Limited (THL) for a reported US$30.5 million. In 2006 fixed line penetration in Malawi was around 1%, and MTL was the only fixed line operator. The government did plan to issue a second fixed line license, but had not done so by the end of 2006. No details were available on the contract award method. The 80% stake was awarded to THL in early 2005, but the sale was hotly contested by MTL management. The process was stalled on a number of occasions by verdicts passed by local courts. Finally, in February 2006, the Malawi Supreme Court declared the sale can go on. This was a second attempt to divest a controlling stake in MTL, after a failed 2003 offer made by a group led by Econet. The THL consortium comprised of local media group Press Corporation Limited (65.4%), Old Mutual (25.1%), Nico Holdings Limited (6.25%) and technical partner Detecon (3.257%). The consortium partner’s shareholding in MTL was prorated based on their contribution in THL: PCL 52.32%; OML 20.08%; NICO 5% DETECON 2.6%. THL committed to increase the number of fixed line connections from some 57,000 to 84,000 in its first year after the takeover, and to 104,000 in the second year. THL was to pay a fine of US$500 for every line it failed to provide in urban areas and US$1,000 for every line it failed to offer in rural areas. In 2007 MTL acquired a controlling stake in the Telekom Networks Malawi, the country’s largest mobile operator (project 1791).

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