CORPORATION ANNUAL REPORT 2009
timelinesbOTswANA TELEcOmmUNicATiONs cORPORATiON
1999BTC Group records an all time high profit of Pula 75.0 million. BTC Group enters into interconnect and backhaul network agreement with mobile operators. Customer connections increased to 144 195 lines.
2001Despite resolution of billing system problems, net profit declines to Pula 2.2 million. Wireless technology introduced in the local loop. BTC Group realises that it has lost significant market share to mobile operators. Introduces pre-paid technology.
2003VSAT technology introduced. Measures to improve technology and quality introduced
2005BTC adopts Intelligent Network Platforms strategy and refocuses its strategy based on broadband data. Broad band is rolled out with ADSL in Gaborone. Profitability returns to 139.0 million.
2007BTC Group awarded a Public Telecommunications Operator licence.
2000BTC Group looses market
share. The new billing system creates doubts.
BTCs image slide. Mobile operators sky rocket with
2002IDI of Ireland is invited to steady BTC Group.
Restructuring commences with 600 staff retrenched, staff numbers dropping to
less than 1,000. Government engages BTC Group for its Rural Development Programme
(Nteletsa Project). BTC Group records an all time high loss of Pula 39 million
2004Profitability returns. Total restructuring cost
Pula 162.0 million. International connectivity established through SAT 3 through South
Africa. BTC Group endorses Government of Botswanas ICT plan Maitlamo Initiatives.
2006Telecommunication liberalisation announcement
by the minister responsible for Science, Communication and Technology.
2008BTC Group launches its mobile service under the brand name
2009Aggressive rollout of the
beMOBILE Network. Successful launch of converged product
offering and expansion of broadband to entire Botswana
Corporate Profile 1
Organisational Structure 2
Vision and Mission 3
Board of Directors 4
Executive Management 6
Chairmans Report 8
Chief Executive Officers Report 12
10 Year Review 16
Business Review 18
Corporate Governance 30
Enterprise Risk Management 50
Brand Management 56
Regulatory Report 60
Human Resources Review 64
Sustainability Reporting 68
Corporate Social Responsibility 74
Environmental Relations and Issues 76
Economic Performance 78
Customer Relations 80
Community Relations 82
Employee Relations 84
Supplier Relations 88
Financial Review 102
Caution Regarding Forward
Looking Statements 104
Financial Review and
Management Discussion 106
Report of The Finance and
Audit Committee 131
Annual Financial Statements 134
botswana telecommunications corporation
about this reportbotswana telecommunications corporation botswana telecommunications corporation
for the year ended 31 March 2009
GroupEBIDTAupPula89.4millionto Pula268.7million ProfitfortheyearPula118.9million
net income operating revenuesale of Goods and services
ebidta - net operating cash Flowearnings before interest Depreciation and taxation
Recommendingdividendof141.4thebe pershareup104.0%. RobustbalancesheetatPula1.65billion Weareconfidentaboutourprospectsfor2009/10
2008/09 2007/08 change main driversSales 835.9 799.2 + 4.6% New sources such as mobile, data, networks increasing together with stabilisation of traditional fixed and voice lines. EBIDTA 268.7 179.3 + 60.5% An increasingly efficient business with margin progressions. Gross margin at same level as at 53.0 percentage points. Operating costs as a percentage of sales down 7.8 percentage points to 88.7%. EBIDTA margin up 9.7 percentage points. Depreciation and amortisation 151.7 152.9 - 0.8% Managed capital expenditure Finance income 45.9 59.3 - 22.6% Lower cash balances Finance expense 21.2 29.2 - 27.4% Lower loans Net profit / income 118.9 58.3 + 104.1% Reduced restructuring costs
dumela! once againBTC today is a company confidently moving
forward, thanks to the essential changes we
made since 2006. We have now become a leaner
company striving to be more responsive to our
countrys and customer needs. We are more than
ever before determined to realise our goal: to be
the communications company of choice.
about this annual reportIt is that time of the year again when we report
on our performance for the financial year. This is
our twenty-ninth annual report since our humble
beginning! In this report, we invite you to share
our successes, failures, difficulties, achievements
and our dreams for the future, the way we see it.
Despite the difficult trading conditions in
Botswana resulting from the world economic
down turn, we are pleased to report yet another
milestone performance for the year 2008/09.
here are some of the highlights for the year:
SuccessfullaunchofbemoBIlE,ourmobile servicecoupledwithonetariffstructure ExpansionofbroadbandtoentireBotswana launchofNteletsaII Sustainedfinancialperformance
05Yearended31march Yearended31marchYearended31march Yearended31march
05 05 0508 08 08 0807 07 07 0706 06 06 0609 09 09 09
Other sales & service
Telephone - International
Data & private circuitsCustomer premises equipment
Telephone - National
Local & access services
strategic initiativesand business targets
botswana telecommunications corporation
area strategic initiatives achievements in 2008/09 business target For 2009 / 10
Services Increase revenue streams by Enhanced broadband services; Entry into mobile market and new Strengthen our support for BTC outlets; Set up customer promoting customer retention tariff plans; Free weekend calling for customers; Reduced rate centres where they can get assistance; Offer batteries for high through flat rate schemes; for, between fixed and fixed, and fixed and mobile. usage customers; Focus on customer lifestyle and establish Improve bundled packages; long-term value plays; Customer satisfaction surveys. Special billing plans; Enhanced handsets subsidies.
Network Continue building a superior Expanded metropolitan network; Currently working on Nteletsa II Continue with network availability and quality; Better network network to handle expanded data in northern Botswana; Improved network resilience and reliability management; Developed managed data services. handling ability. through rigourous testing (99.9 % availability).
Tariff New billing plans (flat structures Introduced bundled tariff packages such as dual play By offering further discount services foster long-term for longer-term commitment); (voice and data) triple play (voice, data and mobility) etc. relationship with our customers; Improved handsets which Bundled tariff plans; Loyalty Upgraded internet packages. can handle multiple sims. benefits; Handset subsidisation.
NewBusiness Continuously explore new traffic Mobile services; Additional broadband customers. Mobile services; Additional broadband customers. insensitive growth areas with other service providers such as banks, shopping outlets.
operatingcosts Reduce technology and handset Further headcount reduction; Rationalised expenditure; Opex to revenue down - Expenditure to match businesscontainment costs. Shared services. outcomes and strategies with further reductions in real terms; Further savings in opex through better process and accountability; Shared services.
Capital Continue to build superior Rationalised capital expenditure and generate cash for investment. Capital expenditure will continue to maintain quality ofexpenditure network to achieve service networks. differentiation and competitive advantage.
Transformation Continue business transformation. Business demonstrated resilience; Hold voice revenue stream. One BTC programme.
Our HistOryBTC Group is a public corporation constituted under the BTC Act 1980 and later amended in 1996. Its mandate is to provide national and international telephony on sound commercial lines.
From its humble beginning in 1980 with about 6,500 access lines provided mostly by electro mechanical switches linked by analogue radio microwave systems, today it boasts of more than 144,000 access lines all connected by digital switches with thousands of kilometers of fibre optic and digital microwave technology.
BTC Group provides services nationally. It has two regional offices, four districts offices and a number of customer care centres. It also publishes the Botswana Telephone Directory and provides a countrywide directory assistance service.
BTC Group is run by a Board, appointed in terms of the BTC Act, supported by an Executive Management Committee. BTC Group is known for its corporate governance practices and is in the forefront of fair corporate reporting in Botswana.
Our BusinessBTC Groups core business is voice and data services through a broad spectrum of modern network platforms. Currently BTC Group is the only fixed line operator in Botswana. BTC Group provides both national and international voice telephony both fixed line and mobile, toll free services, public payphones, internet wholesale access, data services including leased circuits, private wires, very small aperture terminals (VSATs), managed networks and switched data services, customer equipment etc. In 2008, BTC Group commenced a mobile telephony service under the brand name beMobile. BTC Group provides internet and some managed data services through its subsidiary, Botsnet.
BTC Groups strategy is sharply focused on leveraging its leadership in a converged fixed mobile network in three growth areas: voice, data and internet. New services will focus on fixed / wireless / mobile / internet convergence, as well as virtual private networks and advanced data services.
BTC Group is organised on business and functional lines with decentralised operations in over seventeen offices. BTC Group also supplies the backbone network to facilitate cellular communications throughout the country.
An active participator in the development of telecommunications in Botswana through its support for Government ICT policy the Maitlamo Initiative - it takes its role seriously as a revered and responsible corporate citizen.
corporate profilebotswana telecommunications corporation
11100011011100002 BTC ANNuAlrepOrt2009
botswana telecommunications corporation
memBers Of tHe BOard
CHief eXeCutiVe OffiCer finanCe and auditCOmmittee
grOup general managerCOrpOrate affairs
grOup general managerfinanCe
grOup general managerteCHnOlOgy
grOup general managerOperatiOns
grOup general managerCOmmerCial
Head Of prOgramme management
Head Of netwOrk seCurity and fraud management
Head Of internal audit
botswana telecommunications corporation
Our COrpOrate VisiOnTo be the communications company of choice focused on delivering exceptional value to our customers, employees and shareholders.
Our Valuesrespect and trustWe respect and trust each other, treating each other as we would like to be treated regardless of differences.
Ownership and responsibilityWe take ownership of our objectives within the company, accepting responsibility for our actions at all times.
teamworkWe operate as indivisible teams at a leadership, functional and cross functional level to achieve corporate strategy.
performanceWe are driven to perform in such a way that the commercial and operational goals of the company are achieved.
leadershipOur leaders are the role models of the culture we desire.
CustomerEverything we do begins and ends with the customer.
Our missiOnTransform Botswana Telecommunications Corporation into the regional state-of-the art Telecommunications Services Provider, while optimising our overall value and growth opportunities as viewed by our customers, stakeholders and future partners.
Protect and leverage the legacy investment in BTC Group by implementing strategic commercial and network initiatives designed to converge fixed, mobile, and broadband services within a seamless, synergistic, and cost-beneficial environment, which is comparable to any successful regional telecommunications operator.
vision and mission
11100011011100004 BTC ANNuAlrepOrt2009
Board of directorsbotswana telecommunications corporation
1. mr. leOnard makwinJachairman (non-executive)Mr. leonard Makwinja was first appointed Chairman of the BTC in April 2006, to lead the strategic direction of the corporation. He holds a Master of Science Degree in Industrial and Administrative Sciences from City university, uK and Bachelor of Science in Mineral Exploration (Honours) from the university of Cardiff, uK. His extensive career in management spans over fifteen years, including as the General Manager of Orapa and letlhakane Mines and as the Deputy Managing Director of Debswana Mining Company until July 2007. Mr. Makwinja is currently a private management consultant, and is a member of the African Banking Corporation Board of Directors, as well as a member of the Y- Care Board, a non-governmental agency.
2. mr. tHapelO lippe chief executive officer (ex-officio member) appointed october 2008Mr. Thapelo lippe was appointed the Chief Executive Officer of BTC in October 2008. Mr. lippe has over 18 years of experience and has held positions ranging from Microsoft General Manager (13 countries), Orange Botswana CEO / Country Manager, Orange Botswana CIO, international consultancies; had multi-region directorial responsibilities managing diverse teams and projects within varying business sectors; and, has had full practice / organisation management responsibilities in service delivery. He continues to hone his managerial, technical, and financial skills resulting in a proven track record in delivering complex solutions / services and products in a timely and profitable manner; meeting and often exceeding shareholder and market expectations.
3. mr. ratsela mOOketsimember (non-executive)Mr. Ratsela Mooketsi joined the Board in April 2006. He is currently Director of Information Technology, university of Botswana. As a member of the BTC Board, Mr. Mooketsi is currently the Chairman of the Tender Committee. Mr. Mooketsi holds a Master of Information Technology from The university of Newcastle - Australia; Bachelor of Engineering (Honours) in Telecommunications Systems Management and Design (Anglia Polytechnic university); and Bachelor of Science from the university of Botswana.
He joined the university of Botswana in 1994 as Network Manager, an...