BTC needs a strategic partner - former PEEPA boss

Boitshepo Majube | Friday February 7, 2014 13:47

As part of the privatisation process, all backbone assets have been transferred to BoFiNet, a development that has levelled the playing field in the industry and could curtail the BTC’s profitability.

Speaking at the First National Bank Botswana (FNBB) budget review seminar in Gaborone this week, Galeforolwe said whilst an initial Public Offering (IPO) of BTC may be attractive to electorates in 2014, its efficacy and profit sustainability is questionable.

He stated that most Parastatals have not delivered rates of return consistently for a long time. “For a desired result, the attraction of a strategic equity investor is pre-condition to a successful IPO of a state owned enterprise,” he said. 

He stated that BTC should have a partner that is knowledgeable in the telecommunications industry. “I doubt that BTC will manage going it alone,” he said. BTC became a public company in 2012 through an act of parliament paving way for the privatisation, which will result in 49% of its shares listed on the Botswana Stock Exchange in 2014.

Last year BTC handed over the wholesale business it has been handling for government to BoFiNet. The business includes the newly deployed Dense Wave Division Multiplex (DWDM) system, which deals with hardware, software, licences, supporting contracts, network equipment (countrywide and in London), spares and vehicles.

BTC is currently the best performing parastatals having posted profits P375.6 million in 2012. The parastatal also handed BoFiNet the East Africa Sea System (EASSY) and the West Africa System (WACS) rights and obligations plus backhaul links connecting these systems through Telkom Namibia and Telkom South Africa.

Corporate Communications Manager at PEEPA, Montlenyane Baaitse stated that the privatisation was informed by the due diligence that was conducted. Amongst the factors that were looked at, Baaitse said the private sector was found to be best suited to provide this service.

She urged people to see BTC, NDB as an opportunity for viable investment. “Batswana should be ready to buy shares into BTC once an IPO is ready,” she said.

In its 2012 annual report, BTC Chairman Leonard Makwinja stated that with announcements by the Minister of Transport and Communications on the intended separation of some of the BTC’s assets into a separate enterprise, there may be uncertainty over the long term prospects of BTC’s operations in the horizon. “However, we cannot lose sight of our long-term goals of continuous investments in our business, focus on our people, maintaining the high quality of our service and products and embracing new technologies,” he said.

Makwinja said, post privatisation, BTC must continue to develop and improve high-quality new products and services to further differentiate them from their competition.