Our investments are going to pay off, BTCL vows
Ludo Kwapa | Friday July 12, 2019 12:51
The telecomms group has been under pressure from investors as its share price has sunk below the 2016-listing level, amidst seesaw profits.
Individual (retail) investors make up a very large proportion of the BTCL’s share registry and many have taken to social media to express their disappointment with the value they are getting from the telecomms group.
Briefing journalists and analysts on the BTCL’s results for the year ended March 31, 2019, Masunga appeared eager to assure shareholders, saying the group’s focus going forward was to monetise the investment in assets it has been making. BTCL posted a 15% drop in pretax profits to P196.7 million for the year ended March 31, with directors declaring a final dividend for the year of 9.26 thebe per share, down from 13.4 thebe per share the prior year.
“We saw in the past few years our customers voting with their feet because our technology was not working,” Masunga said.
“Our ADSL as a service was quite challenged.
“This is why in the past few years, our focus has been on technology, spending significant funds on modernising and broadening.
“Significant effort and spend went into this space and although we are not there yet, the shift is now to monetise that investment.”
The value of BTCL’s fixed assets rose 12% during the recently ended financial year to P1.5 billion continuing a heavy investment in the group’s infrastructure, particularly the countrywide expansion of 4G network and broadband.
Part of BTCL’s troubles with revenue generation has been slow customer growth and an inefficient billing system. The managing director said both of those issues had been tackled, one through investment and the other through upgrades made in the year. “We believe that we have made the necessary investment to drive user experience and eventually drive revenues,” Masunga said. “We had to converge our billing environment, service provision environment, and product creation environment.
“As an example, we have transferred our mobile base onto the new billing platform and fixes were due to be complete by June.”
The telecomms group, where government retains a 54% stake, listed at P1.15 in 2016 and peaked at above P1.84 in mid-2017 before continually sliding to its current levels of 89 thebe.
The group’s executives have blamed the volatility on the high concentration of retail investors in BTCL’s register, saying these tended towards impulse trading as opposed to institutional investors.
Executives have also said the sliding value is linked to the fact that BTCL’s shares only trade amongst citizens, limiting the full unlocking of their value. The telecomms group has been lobbying government to open up trading of its shares to all investors.