The Botswana Telecommunications Corporation Limited will next month launch an initial public offering (IPO) of 49 percent of its shares which really looks like a generous thing to do. Not so, suggests a report prepared on behalf of the British High Commission.?“BTC prices are crippling,” says the report.?It is these crippling prices that have enabled BTCL to perform as extraordinarily well as the organisation’s Chief Executive Officer, Paul Taylor, told a pitso (grand assembly) to update prospective shareholders about the launch of the IPO.
Taylor said that BTCL’s revenues have been impressive for the past years. ?“Driven by our mobile network and revenue from data and private circuits, we surpassed the billion pula mark. In the financial year 2012/13, our revenues surged past the billion pula mark to stand at P1. 375 billion compared to P 1.187 billion recorded in the 2011/12 financial period,” he told the pitso at the Gaborone International Convention Centre last Monday.?The company’s profit before tax increased by 20 percent from P237 million recorded in 2011/12 to stand at P284m in 2012/13 with net profit margin growing to 21 percent from 20 percent in the previous year. ┬á?Speakers at the pitso rhapsodised about how privatisation in general and the launch of the IPO in particular, would help diversify the economy. Interestingly, a report prepared by South African consultants for the British High Commission identifies the crippling BTCL prices among factors that are stifling the development of a vibrant services sector.?
Noting that internet connectivity and good telecommunications infrastructure are very important for the services sector, the report says that Botswana’s internet service is generally poor and overpriced.?“Though Botswana’s broadband tariffs are said to be among the top 5 lowest in Sub-Saharan Africa (defined as a connection of 256 Kbit/s) at a cost of USD 29.64, it is however, close to triple the cost of broadband in Egypt. Botswana’s internet speed is not among the top 5 in Africa; it is led by Uganda, Senegal, Mauritius and Namibia which are also among the top 10 cheapest countries therefore making Botswana’s internet not competitive among the top players in the TFTA,” says the report referring to the Tripartite Free Trade Area that the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC) are in the process of creating. ?
To be fair to BTCL, it has reduced prices on retail internet products for business customers and selected retail ADSL broadband products. The Ministry of Transport and Communications, under which it falls, has also invested heavily in two undersea cables that will improve Internet speed significantly.