- Revenue, profits tumble
- Suffers from reduction in ICT spend
- Competition intensifies
- Companies negotiate for lower prices
Increasing competition, and tight spending by Batswana has resulted in minimal growth for the Botswana Stock Exchange (BSE) listed telecommunications giant, Managing Director, Anthony Masunga revealed.
He spoke recently at the BTCL financial results presentation for the fiscal period ending 31st March 2018.
According to the BTCL boss, the overall economic environment for the year was subdued, which led to the reduction in ICT spend from enterprises and government entities, with most entities negotiating for lower prices on new and existing services. Further, he said the slowdown in spending also impacted the consumer segments as households were faced with prioritizing their income on basic necessities. Competition in the telecommunications sector continued to intensify with the entry of new internet service providers leading to a downward pressure on prices. This had an impact on our performance for the year
For the reporting period under review, BTC mobile revenue declined by 3 percent mainly attributable to these pressures on mobile revenue. As a result, the company recorded an 8 percent decrease in profit after tax to P217 million compared to P237 million the previous year on the back of decline in revenue to P1 567 million (FY17: P1 615m). The mobile operator recorded a 9 percent increase in administrative expenses to P440 million (FY17:P402m) and a P10 million increase in the tax charge from prior year. Gross profit, however, grew by 3 percent due to 11 percent reduction in cost of sales to P601 million (FY17:P676 million). Masunga says the company made significant savings on transmission and bandwidth costs on negotiated and competitive price offerings from our suppliers.
Further, Masunga said BTCL saw an increase in the uptake of data-centric products in line with market trends. The business during the year made P121 million worth of investments in fixed broadband expansion and LTE/4G mobile broadband optimization to increase network coverage and enhance our value proposition. Total comprehensive income increased by 13 percent to P269 million as a result of the revaluation of land and buildings which is done every 3 years. Masunga says the increase in the valuation is supported by investment in real estate, which included Head Office refurbishment and Retail Store transformation. “These investments were made to improve the work and retail environment and are expected to improve employee productivity, performance and customer experience.” In response to technology trends, BTC says it has adopted modernized, faster and cheaper technologies which are aligned with customer demands.