- News ISPs eat into the BTCL share
- Mobile subscriber base on decline
- Profits also decline
- Share price, market value under pressure
The sole listed telecommunications firm, Botswana Telecommunications Corporation Limited (BTCL), is facing a possible decline in its subscriber base because of rising competition in the Information Communications Technology (ICT) space.
In its 2018 annual report, Managing Director (MD) Anthony Masunga said BTCL has been able to maintain its mobile market share in the face of a shrinking overall mobile market subscriber base and an intensely competitive landscape.
Masunga said Botswana has traditionally been a dual sim market, with mobile penetration in excess of 100 percent. Tables have however turned.
During the year under review, Masunga said they saw a decline in mobile market penetration rates after several years of significant increases.
“Mobile market penetration stood at 159 percent, down from 171 percent in the prior year, 2017,” he revealed. The decline in subscriber base means that BTCL stands to lose some of its customers, which could affect financial performance.
The BTCL boss said the decline in penetration levels is also partly attributable to the sim registration requirements, which have resulted in some simcards falling off the market.
“We expect a true picture of the subscriber base to emerge over time,” he said.
BTCL however takes solace in that it is still the dominant player in the fixed broadband market with 68 percent market share, but have seen an increase in competition in the space from new and existing players.
“We however strongly believe that we can capitalize our extensive fixed network and derive more value from it, on the back of an increase in Internet usage in the residential segment, and in the year under review we registered a 4% increase in fixed broadband usage. There is an overall increase in demand for higher speeds and larger data capacities.”
The 8 percent decrease in Profit After Tax (PAT) to P217million during the year ending 31st March 2018 was on the back of a 3 percent decline in revenue to P1.56 billion.
While revenue declined, BTCL recorded a 9 percent increase in administrative expenses to P440million and a P10million increase in the tax charge from prior year. Gross profit, however, grew by 3 percent due to an 11 percent reduction in cost of sales to P601million.
BTCL’s fixed business (both voice and broadband) is still a major revenue contributor at 65 percent.
BTCL share price has also been taking a hit, dragging down the market Capitalisation of the mobile giant with it. Data analysis from Motswedi Securities, brokerage firm, shows that BTCL share price declined 39 percent year-to-date (YTD). For the past 12 months, BTCL share price reached its highest price of 185 thebe per share. The price shrunk however to a 12 month low of 100 thebe per share.
By August last year when trading at 185 thebe per share, BTCL’s market value was threatening to reach P2 billion. The market Capitalisation has since shrunk to just P1.1 billion, wiping out hundreds of millions in value.
The Company is however optimistic about its future outlook on the back of positive economic forecasts and the significant investments it has made in the network, IT enterprise systems, retail shops and working environment.