Botswana Telecommunications Corporation Limited (BTC) has managed to achieve significant profit growth despite a challenging economic environment that has seen a decline in its fixed network and mobile voice revenues. The company’s unaudited financial results for the half-year ended 30 September 2024 reveal that strategic focus on mobile financial services, data, and cloud solutions is beginning to pay off.
For the six months ending September 2024, BTC reported a profit before tax of P145 million, up from P93.3 million during the same period in 2023. This represents a 55 percent year-on-year improvement, fueled by operational efficiencies and digital transformation efforts. Profit after tax also surged by 57 percent, reaching P112 million compared to P71 million last year.
Revenue growth, however, remained modest, increasing by only 1 percent to P722 million. The continued decline in fixed network and mobile voice revenue, driven by changing consumer preferences and global economic pressures, contributed to this modest growth. BTC noted that “consumer preference is shifting towards mobility and flexible access to data and mobile financial services,” indicating that the company is successfully pivoting towards future-focused revenue streams.
BTC’s efforts to grow in mobile financial services (Smega), mobile prepaid data, and cloud services have been key drivers of its growth during this period. The company has also expanded its financial inclusion initiatives, particularly in rural areas, strengthening its position as a central player in Botswana’s digital economy.
The expansion of the Smega ecosystem, with the onboarding of new services and an emphasis on supporting the unbanked population in rural areas, has contributed to BTC’s growth. The company also highlighted the increased demand for secure and scalable data solutions, which it is meeting through its data centers and cloud services.
Despite these gains, the decline in fixed network and mobile voice revenues continues to challenge BTC’s growth potential. These segments have been under pressure due to increased competition and the global shift towards more flexible communication methods.
BTC’s strategic focus on operational efficiency, including a 20 percent reduction in costs, has helped to mitigate the impact of declining revenues. This has contributed to an improved EBITDA margin of 34.8 percent for the half-year period.
BTC’s efforts to improve operational efficiencies have resulted in a decline in its cost-to-income ratio, boosting profitability and enhancing the company’s ability to reinvest in growth areas. The rollout of fiber has been instrumental in reducing costs and minimising service disruptions, particularly those caused by copper cable theft.
Earnings per share for the half-year period increased to 10.65 thebe, up from 6.80 thebe in the previous year, edging closer to the 15.00 thebe recorded for the full financial year.
BTC remains committed to its goal of becoming Botswana’s leading digital solutions provider by 2025, with a focus on high-speed broadband and mobile financial services. Despite the challenges posed by the country’s economic slowdown, including reduced government spending and a decline in diamond exports, BTC is optimistic about the long-term opportunities in the digital sector.
The company’s shift towards data-driven and mobile financial services positions it as a key player in Botswana’s digital transformation. However, the continued success of these strategic moves will depend on BTC’s ability to navigate the economic challenges and sustain growth amidst the decline in traditional revenue streams.
