Malawi Telecom stands off against government

The Malawian government and Malawi Telecommunications, the country's sole fixed-line operator, are in a standoff over layoffs, raising fears of a communications crisis.

Malawi Telecom laid off over 150 workers last week to streamline operations, but the government claims the move went against the principles agreed upon for the company's privatization.

"When we were privatizing the company, we principally agreed with the company's management that no worker would be retrenched," Information and Civic Education Minister Patricia Kaliati explained Monday. "So this is a breach of the agreement, which we will not allow."

To rehire the workers, the operator is now demanding the government pay it the US$300,000 it would have saved over the next seven months as a result of the layoffs. The government, however, has refused, claiming the company has enough money to sustain -- and even expand -- operations.

The Malawian government sold Malawi Telecom to private owners in 2006 for $27 million. Now owned by a consortium of Germany's Detecon International, South Africa's Standard Bank and the Development Bank of Southern Africa, striking workers have disrupted operations several times since privatization, demanding improved conditions and higher salaries.

Several African countries are currently facing the privatization of state-owned telecom companies due to the high cost of operations. Early this month, the Zambian government announced its intention to privatize the financially troubled Zambia Telecommunications in order to save it from collapse.