With growing competition and diminishing voice revenues, Botswana’s telecom firms could increasingly turn to the data market segment to stay competitive and profitable. The trend has been set globally and seems to be slowly but surely catching up with the local telecoms industry. Currently atleast three operators, BTC, Mascom Wireless and Orange Botswana are stiffly competing for Botswana’s mobile telecommunications market. Of the three, only one, BTC is listed at the Botswana Stock Exchange (BSE) thus regularly shares its financials while the two market leaders Mascom Wireless and Orange Botswana are privately owned.
When making its unaudited interim results for the period that ended September 2017 this week, BTC also gave a hint of what could be going on with regard to voice revenue in the teleco industry in the country.
During the first six months of its financial year, BTC says it has recorded a 5 percent decline in fixed lines voice revenue and a further 2 percent fall in mobile lines.
At the same time, the BSE quoted company recorded a 30 percent rise in mobile data revenue and a further 2 percent growth in access to data. The BTC figures gives a hint of what the other two privately owned operators could be going through.
“The regulator’s directives are pointing downward, these include those related to pricing and licensing”, admits Anthony Masunga at the BTC financial results presentation in the capital Gaborone on Thursday.
The BTC has stated in its annual report that data remains its fastest growing revenue line. During 2016, BTC’s data sales is said to have increased by 21 percent and contributed 29 percent to total sales. The company currently has 600 2G sites, 149 3G sites and 106 4G sites, with more 4G sites to be commissioned in the 2017/18 financial year.
The growth in local demand for data as opposed to voice calls is driven by a number of factors including improvements in the availability and speed of broadband networks, the growing capability and affordability of wireless devices such as smart phones and tablets, and continued dominance of social media.
On Thursday, Masunga confirmed that his company has partnered with Korea Telcom on a network transformation project to improve internet service user experience. The project, which is in response to market demand for improved faster reliable internet is expected to run for twelve months, covering Gaborone, Francistown and Maun.
Meanwhile the Country Intelligence Report which offers a thorough, forward-looking analysis of Botswana’s telecommunications market, service providers and key opportunities says that the fixed/mobile revenue split will be dominated by the mobile segment through the 2016-2021 period and will account for 84.9 percent of overall service revenue by 2021.
The country report for Botswana indicate that being in its early stages of adoption, 4G is expected to record the fastest CAGR , at 71.5 percent, over the 2016-2021 period, to reach 433,000 subscriptions by 2021. At the same time, 2G continues to be the most used technology, accounting for 55.4v percent of total mobile subscriptions in 2016 but is losing share to 3G and 4G technologies, which will altogether represent 68.7 percent of the subscriptions by 2021.
The report further state that competition in the mobile telecommunications market is expected to stiffen as existing local operators focus on affordable data bundles and VAS to drive revenue.