BTCL poised to make Batswana millionaires

The modern world has advanced at a lightning pace over the past 30 years, largely due to the innovations driven by the world’s developed economies.

The process of evolution is a marvel and modernisation has progressed to what it is today as the story of innovation and evolution continues to unfold. Gone are the days when man sent messages by travelling several kilometres on foot, bicycle, ox-back, or when he would climb a tree to announce a community meeting, or send a letter that took no less than three weeks from one end of the country to the other.

The medium of information technology with its associated array of platforms such as cellphones, Internet, Twitter and Facebook amongst others, have drastically altered the communication landscape.
In 1978 Botswana government appointed a task team comprising the late Cuthbert Moshe Lekaukau, Tsietso Mmono, Dr Ponatshego Kedikilwe and Kenneth Matambo to recommend ways of improving telecommunications in Botswana which were at the time run by a government department of Posts and Telecommunications. Their recommendation was to separate telecommunications from posts in order to run it independently.

Government approved this recommendation and BTC was born in 1980, as a body corporate through an Act of Parliament (BTC Act) to provide, develop, operate and manage Botswana’s national and international telecommunications services.

Kedikilwe remembers that after this approval, Cable and Wireless PLC-a United Kingdom (UK) based company was identified as partners to assist government. This was the only logical plan at the time because as a developing country, Botswana had no technical knowhow to start a telecommunications company. 

On the 1st of April 1980, the Botswana Telecommunications Corporation (BTC) was formed under the management of Cable and Wireless. Lekaukau was appointed one of the first members of the Board. BTC, which last year posted a turnover of P1.4 billion enjoyed an uninterrupted monopoly of the telecommunications industry until 1996 when parliament made an amendment to the Telecommunications Act. This move repealed the monopoly of BTC and introduced other service providers in the telecommunications arena.

In came Orange Botswana and Mascom; two companies which gave BTCL competition through the provision of mobile phone services, which the company was not providing at the time. It will, years later, form BeMobile which is now directly competing with the two named companies in the non-fixed telecommunications sector.

A Privatisation Policy was born in 2000, through which the government intended to implement a reform programme to improve the efficiency, productivity and competiveness of the public sector.
Following government’s decision to privatise BTC in 2008, the BTC (Transition) Act was passed by parliament to assist the privatisation process.

How BTC evolved over the years
Dr Ponatshego Kedikilwe
At the time of BTC formation, Dr Kedikilwe was the Permanent Secretary in the Ministry of Works, Transport and Communications under which BTC fell. The Minister at the time was the late James ‘Jimmy’ Haskins. Sharing the memories of the 1970s with Botswana Guardian, Dr Kedikilwe said that those were some of the painful experiences as the forms of communication were very poor and primitive. One would ride on a bicycle to travel from one ministry to another to deliver a message. Also for one to book a call, it would take four to five days. Even to communicate with other countries was just a huge nightmare. “Ultimately Cable and Wireless from UK was engaged and things began to slightly improve. Those were the times before we could even think of digital migration.  But I must say telecommunications is an important industry in any economy. It is a good thing to privatise. The most critical thing is how this will be implemented, its benefits and further realising its intended purpose,” he said.

Sir Ketumile Masire
Former President, Sir Ketumile Masire emphasised on lack of income distribution and lack of investment amongst the major problems that the country has. “This privatisation is a welcome development. It has always been only cattle that traditionally Batswana invested in. There must be a creation of other avenues where money can be saved to give returns. The culture of saving should also be encouraged,” said Masire. Buying BTCL shares will give citizens a sense of ownership and help distribute income to other sectors of the economy, he added.

Prof. Emmanuel Botlhale
University of Botswana Economist, Professor Emmanuel Botlhale says that although this privatisation has only materialised now after years of talking, the economy is currently not doing well and therefore it is good to privatise state-owned enterprises. “BTCL’s balance sheet is positive. They are selling a saleable cow. They have a very good corporate strategy. I still believe they will keep doing better going forward,” shared Prof. Botlhale. Although he reckons the share price is below market price, he believes it is still a way to enhance affordability and citizen economic empowerment. More Batswana will be able to participate in purchase of BTCL shares, he said.

A look into the future
Owning shares in BTCL will provide an opportunity for citizens of Botswana to share the company’s growth and profitability; raise equity capital for the company; and further raise the company profile and investor awareness of BTCL locally.

BTCL’s privatisation is consistent with the Privatisation Master Plan of 2005. This project should engender more hope among Batswana that privatisation can become a vehicle for economic diversification especially since in this case the government is a major shareholder and also the underwriter. It has been observed in some instances, where for instance a private shareholder becomes the major shareholder in a privatised entity and fails to meet the obligations of the deal. The privatised entity then faces operational challenges and eventually collapses.

For example, when the government of Kenya sold Telkom Kenya to the French in December 2007, the main objective was to stop the perpetual pumping of taxpayers’ money into what had evolved into an inefficient monolith. Telkom was privatised because it did not have the resources to invest in new technology. France Telecom was believed to have the solid capital resources to invest in the company and get it to compete with nimbler, modern players. But six years down the line, none of the objectives for which Telkom Kenya was sold has been met.

However, Telkom Kenya, despite its financial problems, is still a strategic commercial enterprise for the country. It owns and runs the largest fixed line telephone infrastructure in the country.
Kenya’s telecommunications market has undergone considerable changes since the landing of four fibre-optic international submarine cables in recent years.

On the other hand Botswana BTCL’s strategy is centred on leveraging its fixed, mobile and convergent products and services potential. The strategy is intended to leverage BTCL’s unique market position as the only fixed and mobile network operator in Botswana. Key BTCL growth areas in the short term are mobile and broadband (fixed and mobile), with converged offers providing the major opportunity in the mid-term. BTCL will make significant investments in growing its mobile and broadband business.

The intention is to fully create a new dynamic organisation from the opportunities in these fields and the inherent confidence within BTCL generated by the accelerating change programme.

Who is eligible?
•    Any citizen of Botswana
•    Corporate entities registered or operating in Botswana which are wholly owned by citizens.
•    Unincorporated associations, partnerships and investment funds either managed directly or by institutional investors registered in Botswana and are wholly citizen owned.
•    Trusts whose ultimate beneficiaries are all Batswana citizens.
•    Local pension funds managed by institutional investors registered in Botswana.
•    Entities operating in Botswana, wholly citizen owned.
•    BTCL employees have a 5 percent share reserved for them from which they will buy under the Employee Share Option Scheme (ESOP). Internally a programme has been made for them to take advances, salaries and gratuities to be able to purchase the shares.