As beMobile’s market share continues to grow steadily, the mobile company is also flexing its muscles to compete in other income generating segments like the Mobile money.
A report by Stockbrokers Botswana says Mobile money services show immense potential, with the segment among the prime drivers of financial inclusion as they make financial services accessible to the unbanked market. According to the report, as at March 2015, the sector had 412, 126 active mobile money accounts, generating revenues of BWP 206 million for the year.
With this potential, the report suggests that penetrating the Mobile money is the next big fight among mobile telephony companies. Currently Orange has 65% market share for mobile money services, Mascom 34%, and beMobile 1% market share. But beMobile is splashing over P110 million recently to boost its brand.
Following the listing of the parent company, Botswana Telecommunications Corporation Limited (BTCL), it emerged that losses attributable to BWP522 million impairment charges of Property, Plant and Equipment were a result of technological changes on a global scale. beMobile is said to be pushing its technological acquisitions to up its game.
The Stockbrokers report further says the mobile telephony sector has seen substantial growth of subscriptions, from 823 070 in 2006 to 3 405 887 in 2015, representing a 10 year CAGR of 15.3%. Mascom has the largest share in the mobile telephony sector, with an estimated 55%, followed by Orange with an estimated 28%.
“beMobile, with an estimated 17% market share, has been growing steadily since its launch in April 2008, and had a subscriber base of 507 321 as at January 2016. BTCL expects to spend about BWP110 million developing its beMobile arm during the year. This will be done on the backdrop of 1% Universal Access Service levy on all identified mobile operators to raise funds towards the Universal Access and Service Fund,” reads part of the report.
Much of beMobile’s growth, which has seen it capture a meaningful share of Botswana’s mobile market is attributable to its low tariff rates and wider network coverage of the three service providers.
The market share between prepaid and post-paid telephony subscriptions is 98% and 2% respectively. Although prepaid calls are more expensive than post-paid calls, prepaid is a service of choice as it allows customers control over their spending through pre-payment of small denominations airtime units.
The Stockbrokers report indicates that Mobile penetration, measured by teledensity, was estimated at 168% in March 2014 (March 2014: 158%), higher than the Sub Saharan Africa’s average mobile penetration of 82.1%. It is estimated that the mobile telephony networks cover at least 95% of the population with varying network capabilities of 2.5G, 3G and 4G.
“Mobile broadband technologies such as 3G and 4G are mostly available in urban areas while in rural areas subscribers access the internet through other technologies such as 2G and Enhanced Data for Global Evolution (EDGE) that are widely deployed throughout the country. Currently, 3G as a percentage of mobile market is estimated at 12.5%; while the newer technology, 4G, or LTE, has already been rolled out by Mascom and Orange. The 4G technology requires 4G ready handsets, which are quite costly, BTCL rolled out the 4G to its customer base in September 2015.”
However the stockbrokers report shares that the slowing annual growth rates of mobile subscriptions suggest increasing saturation in Botswana’s mobile market, while the relatively high penetration rates are likely to be driven by unique form of competition where consumers possess multiple Sim cards belonging to different service providers.
“The multiple SIM cards phenomenon allows subscribers to take advantage of product and price offerings across networks. This practice also ensures that consumers have access to other networks in areas of the country where some networks are not available.” Internet services
There is no doubt that the use of mobile technology has surpassed fixed technology due to its convenience, with mobile internet penetration at 59% and fixed internet penetration at 5%. It is expected as captured by the Stockbrokers report that Mascom (78%), Orange (53%) and beMobile (39%) are fighting for this segment.
Government is currently sitting on 4 400 vacant posts that remain unfilled in the civil service. This is notwithstanding the high unemployment rate in Botswana which has been exacerbated by the recent outbreak of the deadly COVID-19 pandemic.
Just before the burst of COVID-19, official data released by Statistics Botswana in January 2020, indicate that unemployment in Botswana has increased from 17.6 percent three years ago to 20.7 percent. “Unemployment rate went up by 3.1 percentage between the two periods, from 17.6 to 20.7 percent,” statistics point out.
Leading commercial bank, First National Bank Botswana (FNBB), expects the central bank to sharpen its monetary policy knife and cut the Bank Rate twice in the last quarter of 2020.
The bank expects a 25 basis point (bps) in the beginning of the last quarter, which is next month, and another shed by the same bps in December, making a total of 50 bps cut in the last quarter. According to the bank’s researchers, the central bank is now holding on to 4.25 percent for the time being pending for more informed data on the economic climate.
An audit of the accounts and records for the supply of food rations to the institutions in the Northern Region for the financial year-ended 31 March 2019 was carried out. According to Auditor General’s report and observations, there are weaknesses and shortcomings that were somehow addressed to the Accounting Officer for comments.
Auditor General, Pulane Letebele indicated on the report that, across all depots in the region that there had been instances where food items were short for periods ranging from 1 to 7 months in the institutions for a variety of reasons, including absence of regular contracts and supplier failures. The success of this programme is dependent on regular and reliable availability of the supplies to achieve its objective, the report said.
There would be instances where food items were returned from the feeding centers to the depots for reasons of spoilage or any other cause. In these cases, instances had been noted where these returns were not supported by any documentation, which could lead to these items being lost without trace.
The report further stressed that large quantities of various food items valued at over P772 thousand from different depots were damaged by rodents, and written off.Included in the write off were 13 538 (340ml) cartons of milk valued at P75 745. In this connection, the Auditor General says it is important that the warehouses be maintained to a standard where they would not be infested by rodents and other pests.
Still in the Northern region, the report noted that there is an outstanding matter relating to the supply of stewed steak (283×3.1kg cans) to the Maun depot which was allegedly defective. The steak had been supplied by Botswana Meat Commission to the depot in November 2016.
In March 2017 part of the consignment was reported to the supplier as defective, and was to be replaced. Even as there was no agreement reached between the parties regarding replacement, in 51 October 2018 the items in question were disposed of by destruction. This disposal represented a loss as the whole consignment had been paid for, according to the report.
“In my view, the loss resulted directly from failure by the depot managers to deal with the matter immediately upon receipt of the consignment and detection of the defects. Audit inspections during visits to Selibe Phikwe, Maun, Shakawe, Ghanzi and Francistown depots had raised a number of observations on points of detail related to the maintenance of records, reconciliations of stocks and related matters, which I drew to the attention of the Accounting Officer for comments,” Letebele said in her report.
In the Southern region, a scrutiny of the records for the control of stocks of food items in the Southern Region had indicated intermittent shortages of the various items, principally Tsabana, Malutu, Sunflower Oil and Milk which was mainly due to absence of subsisting contracts for the supply of these items.
“The contract for the supply of Tsabana to all depots expired in September 2018 and was not replaced by a substantive contract. The supplier contracts for these stocks should be so managed that the expiry of one contract is immediately followed by the commencement of the next.”
Suppliers who had been contracted to supply foodstuffs had failed to do so and no timely action had been taken to redress the situation to ensure continuity of supply of the food items, the report noted.
In one case, the report highlighted that the supplier was to manufacture and supply 1 136 metric tonnes of Malutu for a 4-months period from March 2019 to June 2019, but had been unable to honour the obligation. The situation was relieved by inter-depot transfers, at additional cost in transportation and subsistence expenses.
In another case, the contract was for the supply of Sunflower Oil to Mabutsane, where the supplier had also failed to deliver. Examination of the Molepolole depot Food Issues Register had indicated a number of instances where food items consigned to the various feeding centres had been returned for a variety of reasons, including food item available; no storage space; and in other cases the whole consignments were returned, and reasons not stated.
This is an indication of lack of proper management and monitoring of the affairs of the depot, which could result in losses from frequent movements of the food items concerned.The maintenance of accounting records in the region, typically in Letlhakeng, Tsabong, and Mabutsane was less than satisfactory, according to Auditor General’s report.
In these depots a number of instances had been noted where receipts and issues had not been recorded over long periods, resulting in incorrect balances reflected in the accounting records. This is a serious weakness which could lead to or result in losses without trace or detection, and is a contravention of Supplies Regulations and Procedures, Letebele said.
Similarly, consignments of a total of 892 bags of Malutu and 3 bags of beans from Tsabong depot to different feeding centres had not been received in those centres, and are considered lost. These are also not reflected in the Statement of Losses in the Annual Statements of Accounts for the same periods.