The Botswana Telecommunications Corporation Limited (BTCL) is unruffled by a 15% drop in pretax profits to P196.7 million, as directors say they expect the group’s “significant” investments in its network in the past few years to monetise this year.
Commenting on the group’s results for the year ended March 31, 2019, BTCL directors said margins had come under pressure due to restrained consumer spend.
This had resulted in a 12% decline on the mobile business “despite the introduction of new products and services in the market and other initiatives to promote uptake”.
However, the current financial year is expected to see BTCL focus on reaping the dividends of its investments in infrastructure, directors said. 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.
“The completion of the Fixed and Mobile Broadband Network has positioned BTCL as the best and widest data network in the country, which enables us to offer higher speed internet through mobile and fixed broadband,” directors said in a statement accompanying the recent results.
“We will continue to launch more innovative offerings that will capitalise on our high-speed internet and grow data usage.
“We believe that given the investments that have been made, BTC is now better positioned to deliver value to its stakeholders in the future.”
It remains to be seen whether the directors’ confidence will filter through to shareholders, who have seen BTCL’s value slide over the years since the listing in 2016.
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 among 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.