Telecoms infrastructure in Malawi

Ten things to know
October 12, 2015

What are the key operating licences required by companies operating telecoms infrastructure in Malawi?

To operate network, application and infrastructure services for voice telephony a single individual licence issued by the Malawi Communications Regulatory Authority (MACRA) is required. However, separate licences are not currently issued for infrastructure services. Tower companies therefore generally do not require any licence to operate infrastructure unless it is specifically required by the service provider’s telephony licence relating to such towers.

MACRA is required by law to publish details of the licences
it issues.

What other licences may be required by companies operating telecoms infrastructure in Malawi?

Building permits for the construction of towers are required under the Town and Country Planning Act from the relevant city assemblies and town councils where the property is located. Such permits can be obtained retrospectively and backdated.

Although there is no specific requirement for environmental permits to be obtained, common practice is that tower companies notify the Environmental Affairs Department prior to any construction of towers.

Under the Aviation Act a tower company intending to erect a structure which exceeds the height of anything (including land) within a 5 mile radius by more than 50 feet is required to notify the Civil Aviation Authority (no licence is issued in relation thereto although the Civil Aviation Authority will typically acknowledge receipt).

What is the principal legislation governing the telecoms sector?

The Communications Act 1998 which put in place a legal framework for:

  • the regulation and provision of services in the communications sector in Malawi, including telecommunications, posts, and broadcasting
  • the establishment of an independent regulatory authority – the Malawi Communications Regulatory Authority
  • the restructuring of the Malawi Posts and Telecommunications Corporation into separate telecommunications and postal business (including privatisation of the telecommunications business)
  • the separation of the administration and provision of telecommunications services from postal services
  • the reconstitution of the Malawi Broadcasting Corporation as a public broadcaster.

Can foreign entities hold telecoms licences or operate as telecoms companies (either as operators or tower companies)? Are there any foreign ownership restrictions?

There is no prohibition against foreign entities holding telecoms licences or operating telecoms companies, although in practice MACRA may request that the licence holder be locally incorporated.

There are no specific foreign ownership restrictions.

Does the government require any ownership stake in telecoms companies? Must telecoms companies pay any royalties or similar payments to the state/government?

The government does not require any ownership stake in telecoms companies.

No specific royalties are required to be paid to the government.

Can security be granted over (i) telecoms licences and (ii) shares in telecoms companies?

Licences are specific to a licensee and cannot be used as security.

Security can be granted over shares in telecoms companies. If the security holder is not resident in Malawi approval is required from The Reserve Bank of Malawi to ensure that remittance of any payments out of the country to the non-resident entity would be authorised.

Is there a centralised land system in Malawi. What (if any) interest in land is required for a company to build telecoms infrastructure on that land?

There is a centralised land system in Malawi. There are three categories of land holdings in Malawi: customary, public and private. Public land (including government land, national parks, conservation, and historical areas) is land occupied, used, acquired, or held by the government in the public interest. Private land is owned, held or occupied under freehold title, lease, certificate of claim, or land registered as private land under the Registered Land Act of 1967. Customary land is all land held, occupied, or used by community members under customary law. Customary land is vested in the President in trust for the people of Malawi and is under the jurisdiction of customary traditional authorities.

Public and private land are registered in the Deeds Registry or Land Registry depending on location in the country.

By law a telecommunication operator may:

  • with the permission of the relevant public authority enter upon any public land for the purpose of constructing telecoms infrastructure on that land
  • with the consent of the owner enter upon any customary land for the purpose of constructing telecoms infrastructure on that land
  • with the consent of the owner of the land, enter upon any private land, for the purpose of constructing telecoms infrastructure on that land.

Are any stamp duties or registration fees payable on facility/security documentation
in Malawi?

Ad valorem stamp duties are payable in respect of primary security at 0.6 per cent of the amount secured and in respect of collateral security at 0.15 per cent of the amount secured. Nominal stamp duty of K500 would be payable in respect of a pledge of shares.

Are there any exchange control restrictions
in Malawi?

There are exchange control restrictions. Any payment to a non-resident requires the authorisation of The Reserve Bank of Malawi.

Applications for approval to remit foreign currency out of the country are done through commercial banks. The timing of the application process depends on the availability of dollars or other foreign currency at that time although it is typically not a lengthy process.

Are English court judgments recognised and enforced in Malawi. Is Malawi a party to the New York Convention?

Malawi is not a signatory to the New York Convention.

English court judgments will usually be enforced in Malawi once they are registered with the High Court.