10% Internet levy in Malawi - a step backward

Sunday, May 24, 2015

It never rains but pours for us, Internet users in Malawi. While grappling under one of the most expensive telecommunication tarrifs in the world, the government has decided to introduce a 10% levy on Internet, SMS and other data transfer services. In 2013, the government already introduced a 16.5% Value Added Tax (VAT) on Internet services. Apparently the Minister of Finance, in his 2015/2016 budget presentation argues that there has been a "tremendous uptake" of telecommunication services in the country hence the need to increase the tax base through this avenue to finance the zero-aid national budget from local resources. Statistics, however, show otherwise. According to a report by BuddeComm, by the end of 2014, the market penetration rates for telecom services in Malawi were 36% for mobile telephony, 1.9% for fixed telephone services and 6.1% for Internet services. It is clear that there is no tremendous uptake of telecom services in Malawi particularly for Internet services. It is thus a step backward to introduce levies that will stifle the already paltry Internet uptake in Malawi. In this post, I dwell much on how Internet access can promote trade and entrepreneurship in a country like Malawi.

Technologies like the Internet have been shown to promote trade and entrepreneurship even in developing countries as the Internet provides a platform through which manufacturers and service providers can showcase their products and services to a global audience. For example, a tourist attraction whose information has been put online is likely to attract a stream of international tourists. Companies and organizations which have an online presence clearly expose themselves to a larger market audience. This is also true for small and medium enterprises. Simply put, an online presence is a must for any progressive enterprise. Stifling Internet access through Internet levies is therefore a clear contradiction to the policy of promoting trade and entrepreneurship in the country. For further reading, a 2006 paper by Clarke & Wallsten provides insights on the linkages between trade and Internet usage.

The Internet has also provided self-employment among enterprising youths in Malawi. With the prevalent high unemployment rates in the country, some youths have taken advantage of the many opportunities provided by the Internet through businesses like website development, internet caf├ęs, computer networking, etc. With the rising costs in Internet access, many of these businesses will be less patronized hence threatening their very existence. Where is the much touted youth empowerment then?

It is also a fact that an increasing number of Malawians are looking at the Internet as a source of vital information on education, current affairs, business, etc. For example, on the online business directory we are running, Biz Directory MW, we get not less than 100 page views per day with most traffic emanating from search engines such as Google and Bing. And 80% of all search queries come from within Malawi. This empirically demonstrates that many Malawians are increasingly using the Internet as a source of non-trivial information such as business information. Again, we can see that access to the Internet is something that should be encouraged to stimulate entrepreneurship in the country.

Other countries like Rwanda have put technology at the heart of their development strategies and the results are there for all to see. Lets build a Malawi that can escape from the shackles of poverty through progressive policies. Affordable Internet access is a need and not a want.

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Why Facebook's internet.org initiative is bad even for developing countries like Malawi

Friday, May 15, 2015

Facebook's Internet.org initiative claims to have the objective of bringing basic Internet to everyone in the world. Through this initiative, a few select websites chosen by Facebook and its partners can be accessed via mobile internet for 'free'. The initiative has just been implemented in Malawi in partnership with two of Malawi's mobile phone operators - TNM and Airtel Malawi. At face value, it looks like a great initiative. However, personally, I have reservations on the initiative based on the following reasons.

First, the initiative violates the principle of Internet or net neutrality. For starters, Internet neutrality is the principle that Internet service providers and governments should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, or mode of communication (Wikipedia). The term was coined by Columbia University media law professor Tim Wu in 2003. Clearly, by selecting a few websites over others, Facebook and its partners are not treating all web content equally and therefore giving undue advantage to certain websites and services over others thus stifling innovation and competition. The Internet is what it is today because of innovation and competition. And if anything, this idea of filtering out some preferential websites and services over others is taking away the fundamental human right on the right to choose. Why should Facebook and its partners choose for 'poor' people what they can freely access?

Second, this initiative should not hoodwink the masses in developing countries like Malawi that it is a free service. In my opinion, this initiative gives Facebook and its partners undue advantage over others by cleverly putting themselves in a preferential basket. In other words, as more people access the Internet through this initiative, it increases Facebook's and its partners' advertising constituency. Facebook and its partners should have been honest on this other than operating on a gimmick of a charity banner.

Third, the very idea propelled that 'Internet.org by Facebook' is misleading. Internet is not Facebook and neither Facebook is Internet. The Internet should be free from any corporate control.

Fourth, what people need are affordable internet services for everyone in the world. And in this case, we are talking of affordable access to the whole of the Internet and not necessarily 'free' access to some select few websites chosen by Facebook and friends. In Malawi, Internet costs are unjustifiably very high but certainly what many want is affordable access to the whole of the Internet other than 'free' access to a select few websites whose content is not even local.

I rest my case.


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