Botswana’a BTC sees profits slump as costs go back up

Mergers, Acquisitions and Financial Results

Although Botswana incumbent BTC saw its turnover go up, costs rose ahead of increased income and saw it achieve a much lower level of profit in he run-up to launching its new mobile service.

BTC saw its turnover for the period ended 31 March 2007 jump from P739.1 million (US$121 million) in the same period last year to P803.4 million (US$132 million). However, the parastatal's net profits were down 15.1 percent from P138.7 million (US$22.8 million) in 2006 to P117.8 million (US$19.4 million) largely due to high operating costs.

Total expenditure went up to P287.6 million from P223.3 million in the same period last year while total assets ballooned by P34.4 million to P1.6 billion. BTC's new growth path follows the transformation it underwent in 2004 after it engaged Irish Development International (IDI) consultants to turn the loss-making parastatal around.

The strategy, which was spearheaded by Noel Herrrity (now running Zantel), entailed the retrenchment of 600 employees. It paid off immediately when the BTC reported a profit of P36. 2 million for 2004 from the previous year's loss of P11 million widely blamed on a customer exodus resulting from a controversial billing system bought and installed at the cost of P60 million (which failed to work for several months) and new competition from mobile phone companies.

The corporation's financial statements revealed that BTC management welcomed the award of Public Telecommunication Operator (PTO) licences that would see BTC competing with Orange and Mascom. The PTO licences allow the BTC, Mascom Wireless Botswana and Orange Botswana to offer mobile telephony, fixed telephony and Internet services all under one licence.

Mmegi/The Reporter