Too much whining from former State-controlled firms

The other day, Malawi Switch Centre (Malswitch) whined that its creator—the Reserve Bank of Malawi (RBM)—was throttling it systematically, leaving the firm to face a slow and painful death.

At issue, according to tersely written exchanges between the two institutions that Weekend Nation was recently privy to, is RBM’s decision to facilitate the setting up of a parallel National Switch to be run by the Bankers Association of Malawi (BAM).

To Malswitch, the central bank’s move effectively means that RBM has left Malswitch—initially a project in which the central bank invested K1 billion in 1999 before hiving it off in 2006—to hang.

Why would Malswitch say that?

Apparently, the company depends on switching services mainly to banks for 64 percent of its revenue.

The firm moans that if this revenue line is cut as is likely to happen when BAM takes over services such as auto-teller machine (ATM) transactions and electronic transfers, its survival will be in doubt and that jobs of most of its 75 employees could be lost.

On the other hand, the RBM argues that Malswitch was delinked from RBM in 2006 and is now an independent company with its own management and board of directors—meaning that it cannot expect to be hand-held by the central bank forever, urging the company to design turnaround strategies and diversify its revenue lines for it to survive.

Just to put you in the picture, Malswitch is an integrated technologies business with core activities in the areas of electronic payment, information technology infrastructure and data communication services.

The company was established as an RBM fully-funded project in 1999 and was later incorporated in March 2006 after a prior five-year gestation period during which the operations of the company were run as part of the central bank.

After 2006, the company was left on its own to fully evolve into an independent going concern.

From this brief company profile, it is clear that switching services are only one line of business for the company. It has others that it can further develop for additional revenue—if it is ready to face competition from similar service providers.

Moreover, Malswitch was an RBM project—a work undertaking with a finite time frame to achieve a specific result.

In other words, Malswitch, as a project, had a definite beginning and end. When something ends, you close the chapter.

And that’s what RBM did. So, what’s the fuss? The problem is that Malswitch has struggled to move with time. Just look at the problems that Malswitch-linked ATMs go through. It is a nightmare.

Then there is also Malawi Telecommunications Limited (MTL), formerly wholly owned by the government but is now in private hands.

MTL, too, is panting over government’s move to award a K16 billion contract to China’s Huawei Technologies to install fibre backbone network that the fixed line operator says it already has and wonders why Capital Hill did not consider consulting it on its capacity before deciding to bring in another platform.

Mind you, I do not approve of the way the Office of the President and Cabinet (OPC) sealed the fibre optic deal with the Chinese that includes installation of a fibre optic cable network, implementation of national registration system, setting up of a data centre, establishment of enhanced electronic communication systems such as Voice over Internet Protocol (VoIP) and video conferencing. MTL says it has the capacity to do all this and this capacity is being underutilised currently. Well, has MTL revisited its marketing strategy, specifically its pricing plan? Is it competitive?

I know MTL wants to have a bigger share of the market, but as a consumer, all I want is to have affordable rates and if that can be achieved by government bringing in more players, so be it, especially when the rates that local private Internet service providers charge are very expensive and not sustainable. So, my message to the cry babies is: Buckle up or back out!

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