Since its debut on the local bourse, BTC Limited’s performance has remained stagnant, severely overshadowed by its peers, Mascom Wireless and Orange Botswana.
It is easy to understand why. BTC Limited’s peers are aggressive and gobbling up market share with innovation and aggression. The sacking of Managing Director Anthony Masunga is linked to the company’s poor performance as leadership was believed to have lacked innovation.
Post listing in 2017, BTCL revenue stood at P1.6 billion but has haemorrhaged to P1.4 billion under Masunga watch in 2024, a difference of a cool P200 million, an equivalent of 12.5 percent.
Profit after tax, on the other hand, stood at P237 million in 2017, but 7 years later in 2014, it sits at P157 million, depicting a difference of a whopping P80 million, an equivalent of a 33 percent decline.
The financial results for the year ended 31 March 2017 showed a significant performance improvement. The company registered an improved Profit After Tax of P237 million, a 164 percent increase year on year. At the time, BTC’s main target for its first-year post-listing was to ensure the return of value to shareholders by delivering on its financial commitments outlined in the Initial Public Offering Prospectus.
At the time Anthony Masunga was proud to say the solid bottom line performance was a result of an 8 percent increase in revenue year on year to P1.63 billion. Further, EBITDA at the time grew by 40 percent to P369 million year on year. BTCLs’ strategy was focused on mobile business growth, data and broadband growth, optimising costs while improving customer service at the same time, which was more or less the same strategy adopted by Mascom and Orange.
Basically, all mobile network operators focus on growth, driven mostly by mobile and broadband customer growth, new products and new market growth. To retain and attract more customers, MNOs tend to create superior customer experience by delivering relevant products and services to enhance customer convenience in response to the latest market trends. Further, this is done efficiently to minimise costs and improve returns. Innovation is at the core of MNOs’ performance, with new products and business lines that can give them a competitive advantage. High-performance culture is also important.
Post listing on the BSE, the market expected BTCL’s growth to sour and eat into the market share of Mascom Wireless and Orange Botswana but that has never happened. BTCL has always had the advantage of being a state-controlled firm, which meant it had the government goodwill, more so that the government is determined to drive citizen economic empowerment.
Further, it is believed that being listed on the Botswana Stock Exchange (BSE), which expanded BTCL’s shareholders to over 50,000, diversified a pool of possible customers to BTCL. BTCL attracted all pension funds at its Initial Public Offering as well as high-net-worth individuals while some are captains of leading private sector enterprises. These are individuals who had the power to influence business towards BTCL if only its operating model and management style were vigorous enough to compete and attract more business.
Post listing, which resulted in BTCL ceasing to be government-owned, there was an expectation that BTCL will be more efficient, innovative and as aggressive as other privately owned MNOs. Rather, BTCL was not as effective and innovative as Mascom and Orange, and as a result, its product diversity was not as attractive to customers, while efficiency also improved less.
Its performance post-listing declined against expectations of money.
Profitability declined from the Profit After Tax of P237 million seen during the reporting period ending March 2017 to P217 million, having declined by P20 million, an equivalent of 8.4 percent.
By March 2019 BTCL’s performance further tumbled recording a profit after tax of P162 million for the Financial year under review, a decline of 25 percent compared to P217 million recorded in the previous year.
In 2018, BTCL revenue was also under pressure, as it had declined to P1.56 billion, from the P1.64 billion seen in 2017, a year post-listing. Revenue is basically sales revenue. In the case of BTCL, it would be derived from voice calls revenue, SMS, broadband and mobile data revenue as well as its fixed-line revenue. The decline in revenue meant that BTCL was making less money from its product offering, which can only mean a reduced uptake of its offerings. In essence, it meant that BTCL was shedding market share to Mascom and Orange.
In 2019, BTCL revenue was at P1.4 billion.
This resulted in a decline in earnings before interest, taxation, depreciation and amortisation (EBITDA) to P349 million as compared to the P368 million seen in 2018.
In 2019, Masunga argued that the overall decline in revenue is mainly attributable to unfavourable trading conditions. This saw restrained consumer spend, resulting in a 12 percent decline in the mobile business despite the introduction of new products and services in the market and other initiatives to promote uptake.
Botswana remains a dual SIM market, with mobile penetration in excess of 100 percent. The overall mobile market subscriber base in 2019 increased by 2 percent from 3.18 million to 3.35 million.
At the time, while BTCL registered a 2 percent growth in total mobile subscribers; its mobile market share declined marginally to 15 percent as compared to the 16 percent seen in 2018.
Masunga blamed the decline on, “general growth in the overall mobile market subscriber base and an intensely competitive mobile market.”
In 2019, BTCL’s dominance in the fixed broadband market at 72 percent market share was also under pressure from new and existing Internet Service Providers (ISPs) on the fixed broadband product offering.
BTCL’s financial performance continued to dwindle despite its continued investment in technology to better its product offering.
In 2020, BTCL launched the Sentlhaga Data Centre – an Uptime Institute Tier 2 Certified Centre where Millions of Pula were invested. Sentlhaga Data Centre Facility is a Tier ii, Uptime certified data centre. It is the first Data Centre to be certified in Botswana and one of the few in Africa. It was built to be the heart of BTCL, offering a secured, scalable, cost-effective environment to house customers’ ICT platforms and it is the home to BTCL Cloud Connect Offering.
It was expected to attract more clients and rake in revenue. But the financial performance proves otherwise. BTCL spent money on more investments. These included the expansion of FTTH – Fiber To The Home to other areas, including Phakalane, Gaborone North, Greater Gaborone and other areas. The telco launched the 4.5G (LTE) – with 99 percent coverage of major centres and higher download speeds of up to 100 Mbps. BTCL further launched revamped data-centric products and Enterprise solutions as well as established a strategic partnership with global conglomerate, Microsoft.
But its revenue declined in 2020 to P1.39 billion, declining from P1.4 billion in 2019. Profit also took a nosedive to P106 million, a significant decline from P162 million seen in 2019.
Revenue increased marginally to P1.43 billion in 2021, which led to a 16 percent increase in profit after tax to P135 million. Although it grew as compared to the previous corresponding period, it was significantly lower than the P257 million recorded in 2017.
Masunga at the time said the growth was driven by the slight increase in revenue and robust cost reduction strategies that improved EBITDA to P463 million, leading to an increase in cash.
While revenue marginally declined in 2022 to P1.39 billion, profit after tax rather ticked 2 percent to sit at P141 million. The growth was driven mostly by BTCL’s cost reduction initiative leading to a 3 percent EBITDA increase as well.
By March 2023, BTCL’s revenue grew by 0.6 percent to P1.4 billion but profit after tax declined by 23 percent to P108 million, and Masunga blamed increased costs of copper network replacement and human capital optimisation being the main extraordinary costs incurred during the year.
In 2024, revenue grew marginally to P1.43 billion, but profit after tax grew to P157 million. BTC’s revenue has not been growing impressively since listing, and Masunga did admit this a few weeks back at the BTCL financial results announcement.
However, to grow revenue Masunga stated that expansion is part of BTC’s strategy.
“We have looked for opportunities here in Botswana, but they were not great,” Masunga said.
“We went to Zambia and they were also not so great when we looked at them.”
Nonetheless, he indicated that it is a long process that also requires the attention of the executive committee.
“So, yes Botswana is a small market and expansion is an area of focus,” Masunga said.
