By Maureen Kawerama (PIJ Fellow)
The Indian-owned multinational mobile and data service provider, Airtel Malawi plc, is a company that is priding itself on registering huge profits this year. And it is only ironic when it gets accused of allegedly using stringent means of accruing such benefits at the back of dealers that complain of exploitation.
Those that work with the telecommunication company to generate this kind of revenue, feel shortchanged and are of the view that the company is ill-using them.
On December 24, 2021, Airtel Malawi plc announced through its company secretary Hlupekire Chalamba that the company’s profit after tax for the year ending 31st December 2021 is expected to be approximately 35% higher than the profit reported in the previous corresponding period.
For several months now, Platform for Investigative Journalism (PIJ) has been conducting investigations by talking to Airtel Money agents, distributors, and sellers of airtime cards, which revealed alleged exploitation, which they said the company is subjecting them to.
The mistreatment, they say, is very evident when one considers the commissions that the sales agents earn when they merchandise Airtel products and services. They describe the commissions as pathetically measly.
They, therefore, accuse the company, which was incorporated on 3rd September 1998 as a private limited company but re-registered as a public company on 18th November 2019 and licensed under the Communications Act 2016, to operate as a mobile telecommunications service provider in Malawi, of giving them a raw deal on commissions, yet they make millions for the company.
The Agents are all alone
Our investigations have taken us to Airtel management, Malawi Communication Regulatory Authority (Macra), Reserve Bank of Malawi (RBM), Ministries of Labour and Trade, Competition, and Fair Trading Commission and they all played a game of pushing the responsibility to the other. The agents are all alone.
Airtel Malawi plc remains a leading mobile telecommunications company and is connecting millions of Malawians to the world through ‘unrivalled data and voice solutions’, as well as high-speed fixed broadband internet services.
Airtel also offers the largest mobile money services in the country through Airtel Money.
People interviewed, say they feel cheated when they invest their money in the Airtel money and operate the kiosks. They are also allegedly forced to buy voice credit cards which do not make profits to necessitate their investing in the same.
Findings in Mzuzu, Nkhotakota, Ntcheu and Mangochi Districts
PIJ made its investigations in four districts where the Airtel money agents, franchisees, and sellers of airtime cards reveal that indeed not much benefit is accrued in terms of making profits.
Shuppie Mkandawire Nyasulu, a Mangochi-based seller of Airtel units said she has been doing the business for five years, but she doesn’t get any tangible profit from it.
“I have been doing this business for five years, but now I stopped because I wasn’t getting enough profits,” she said. “For example, I used to order the units[Airtime vouchers] of K9, 500 from Airtel distributors, but the profit which I was getting after selling those units was K500. I was really struggling although I was doing the business.”
She added that she was finally forced to stop because the company was also not allowing her to be selling other products.
Another Airtel Money Agent from Mangochi-Monkey-bay, Alick Nyirenda, has been doing the business for 10 years and concurred with Nyasulu.
“We have done this business for decades, but we can’t point at anything as achievement from this business,” he said. “The profits we get are peanuts.”
“Imagine if we sale units valued at K400, 000 our profit is only K20, 000 because we order them at K380, 000 we sale them at a total value of K400, 000,” he added.
He said to make more profits one has to sell a lot of units and according to Nyirenda, selling units is not an easy task as it takes a month.
Nyirenda said it means annually he makes K4, 560,000 for the company while he carts home K240, 000.
He also expressed his worries over the cuts in commissions that Airtel effected without consulting Airtel Money agents.
“At first, the commissions which we were getting as the Airtel money agents for both deposits and withdrawals was 4.5 percent and it was enough for someone to survive in business, but the company reduced those commissions from 4.5 percent to 2.5 percent which drastically affected our profits,” said Nyirenda.
He, however, said Airtel no longer uses percentage in paying its agents but uses different bands or categories.
For instance, he said from K50.00 to K499 they get a band of K2.00 and from K2.00 the government deducts 20% for the VAT which means the Agents get K1.6, and just like that, there are different bands for any amounts sent and withdrawn.
Nyirenda said introducing the bands has done nothing to improve the life of an agent. Nyirenda wishes the company reverted to the old ways of paying its agents which he said was much better and rewarding.
Nyirenda also added that when he started the business in 2012 he thought the business was going to take away his financial problems, but up to date, although he is still doing it, he is still facing a lot of challenges.
“If I had enough capital I could have just stopped doing this business and ventured into another one because this one is not changing my life,” he said.
Another painful thing, according to Nyirenda, is that once they start selling other products in the kiosks for sustenance, Airtel freezes all their accounts.
Another Airtel Money Agents, Hussein Yasin Suwedi from Ntcheu district and Chikumbutso Gera of Mangochi district concurred with Nyirenda saying that the company does not consult them whenever they are making decisions concerning the issue of commissions.
The two say they were not consulted and only realised that the commissions have gone down but when they tried to complain to their supervisors in the districts they were referred to customer care which told them to send their complaints through e-mail.
Since they sent the email, they are yet to receive any feedback which they said is painful.
Thirty-eight-year-old Lonecy Chiputa, from Luwinga in the northern city of Mzuzu, said profits one makes from Airtel money business depends on the type of the transaction.
She said the more they get customers to cash out, the more they make commissions, although, at the moment, the commissions have gone down as compared to the time she started this Airtel Money business.
Before, she would get a commission of K1000 when customers would send K100 thousand now sending the same amount, she only gets K800, which reduces more when they have to pay 20 % VAT, which leaves them with K640.
Looking at all this, Chiputa says it is unfair not to allow them to sell other products like sweets at the Kiosk.
The investigations have also established that many people have lost their hard-earned money due to the nature of profits.
Charles Maulana of Mangochi district says the company closed all his Airtel Money Kiosks and branches and froze all his Airtel money accounts after the company found out that he was doing another business with TNM Company.
Hopeson Kadoweka, Airtel Money Agent from Nkhotakota district pleaded with Airtel Malawi Company to consider revising business conditions.
One Airtel Malawi franchisee who did not want to be named said Airtel Malawi Company fails to stick to the agreement which both parties sign when they are venturing into the business.
“Their staff members are too arrogant and cruel to us. They always use threats,” he said.
For example, he said Airtel Malawi provides a threshold on how much a money agent can facilitate in sending, where one has exceed the limit, the company deducts the money from their commission, which he says is very bad and that whenever they try to ask for justification for such actions, Airtel Malawi officials always threatens them.
Not Macra’s Role
Macra, a regulator of the telecommunication industry including mobile companies in Malawi says its role ends at ensuring that these companies are providing a reliable network as well as ensuring that transactions go through.
Macra communications manager Clara Ngwira said the role to regulate mobile companies in as far as money transactions are concerned rests with the Reserve Bank of Malawi.
“We work hand in hand with RBM where we focus on ensuring the service by operators should always be available and transactions are going through while Reserve Bank looks at the part of money transactions,” she said.
“Airtel PLC has a company or subsidiary called Airtel Mobile Commerce Limited that looks at the money transactions and is responsible for the management of agents. While Macra regulates the Airtel Plc which provides the network,” explained Ngwira.
She also said the agreement between Airtel and its agents who sell airtime is best handled by the Ministry of Labour and the Ministry of Trade to some extent.
RBM says it’s Macra
However, one of the officials from RBM’s Public Relations Office, Mzithembi Mbekeani said as a regulator of financial institutions, RBM only intervenes when some money goes missing. She said it’s Macra’s role to oversee issues of mobile money.
Airtel Malawi Takes Months to find a response
Airtel Malawi Company heard all the allegations as PIJ presented to them through a questionnaire, but their spokesperson Nora Chavula Chirwa kept saying that she was still waiting for her boss to give her the information that could help explain the company’s side of the story.
PIJ waited for her response for the month of November with countless reminders, but she kept providing the same response.
“Let me ask my boss for such information. I should be able to provide it any day” this is what Chavula has been saying whenever contacted.
Ministry refers the matter to CFTC
Ministry of Trade spokesperson Mayeso Msokera referred PIJ to the Competition and Fair Trading Commission (CFTC).
“Hi Maureen, Kindly contact the Competition and Fair Trading Commission,” responded Msokera when asked to comment on the alleged injustices suffered by those working with Airtel Malawi plc.
When contacted, Spokesperson for the Competition and Fair Trading Commission, Innocent Helema, said he wanted more time to investigate on the matter.
He also referred PIJ to results of CFTC investigations against Airtel Malawi launched on 16th September 2020 following several complaints from consumers against the company, pertaining to how the Khethekhete Bonus was being operated and paid out to consumers so that even where it was earned it was not paid out in some instances.
“After investigations and deliberations, the Commission ordered Airtel to pay a fine of MW2, 113,099,660.00 for engaging in unconscionable conduct in the trade of goods and services.
After the decision to fine Airtel Malawi was made, the service provider applied to the Supreme Court of Appeal for a stay order not to pay the fine until the appeal is concluded,” he said.
However, the Supreme Court of Appeal refused to grant the stay order and this means that Airtel Malawi has to immediately pay the fine failing which CFTC will be able to execute its decision against Airtel.
It is clear that controversies surrounding Airtel Malawi’s business practices continue to be challenged. However, as it stands now, it is clear that failure to resolve the matter by all the involved parties as continue to push the blame to one another, at the expense of complaining agents of Airtel Malawi, .