Botswana Telecommunications Authority // ANNUAL REPORT 2013 OUR BUSINESS This reporting period marks the 02 Key Financial Data 04 Our History final year of the existence of the Botswana Telecommunications GOVERNANCE Authority (BTA). Over its sixteen 08 Chairman’s Statement years of existence, the BTA 10 Board of Directors 12 Chief Executive’s Statement has issued Three (3) Public 14 Management Team & Structure 16 Corporate Governance Telecommunications Operators licences, Thirty Two (32) Private REVIEWS Telecommunications Network 22 Market Review Licences and Sixty Eight (68) Value 25 Engineering Review 27 Broadcasting Review Added Network Service (VANS) 30 Compliance and Monitoring Review 34 Corporate Communications Review licences. Over the same sixteen 39 Human Resources year period, fixed telephony 40 Future Outlook subscriptions grew from around ANNUAL 148 000 to just over 162 000, FINANCIAL mobile telephony subscriptions STATEMENTS grew from zero (0) to almost 44 Corporate Information 3.1 million while Internet users 45 Members of the Board Report 66 Members’ Responsibility and Approval reached 977 462. The BTA will 47 Independent Auditors Report 48 Statement of Financial Position be succeeded by the Botswana 49 Statement of Comprehensive Income 50 Statement of Changes in Funds Communications Regulatory 51 Statement of Cash Flows 52 Accounting Policies Authority with effect from the 57 Notes to the Annual Financial Statements 1st April 2013. 69 Detailed Financial Statements Botswana Telecommunications Authority 206/207 Independence Avenue Download the Gaborone, Botswana BTA 2013 Annual Report: www.bta.org.bw T : +267 395 7755 F : +267 395 7976 E : [email protected] Botswana Telecommunications Authority // Annual Report 2013 3 Botswana Telecommunications Authority // Annual Report 2013 1 OUR BUSINESS // KEY FINANCIAL DATA SURPLUS FINANCIAL REVIEW : 2013 vs 2012 FIGURES IN PULA 2013 2012 FOR THE YEAR 2013 2012 Statement of Comprehensive Income P’MILLION P’MILLION Revenue 114 638 901 93 601 614 Other income 1 185 105 854 462 +28.2% Revenue 114.64 93.6 Operating expenses (83 157 764 ) (69 708 659) Other income 1.19 0.85 YEAR P’MILLION Surplus for the year before Operating expenses -83.16 -69.71 finance income 32 666 242 24 747 417 2013 40.58 Surplus for the year Finance income 7 409 284 6 417 757 before finance income 32.67 24.74 Fair value adjustments 500 000 500 000 40 575 526 31 665 174 2012 31.66 Finance Income 7.41 6.42 Fair value adjustments 0.5 0.5 Statement of Financial Position 2011 25.98 Surplus for the year 40.58 31.66 Assets Non-current assets Investment Property 8 000 000 7 500 000 Property, plant and equipment 75 950 998 81 862 839 83 950 998 89 362 839 REVENUE pay structure and money was withheld The BTA revenue comprise of turnover fees, from employees’ salaries towards statutory The BTA recorded Current assets Trade and other receivables 33 807 624 25 715 209 payments. Since these are not permitted radio licence fees, system licence fees and Prepayments 401 756 458 806 service licence fees. Turnover fees constitute deductions under the Employment Act, the a surplus of Pula Cash and cash equivalents 224 441 192 175 451 383 significant share of total revenue at 81%. Authority on a conservative basis made a 258 650 572 201 625 398 Total revenue increased by 22.5 % from Pula provision for a possible liability for the money 93.60 million last year to Pula 114.64 million withheld. 40.58 million, Total assets 342 601 570 290 988 237 during the year. The increase was mainly due to the turnover fees from Botswana OTHER INCOME representing an Funds and Liabilities Telecommunications Corporation for the The BTA invested its funds in fixed deposits Funds revenue generated from its subsidiaries for the and money market with banking institutions increase of 28.2% Proposed dividends 10 143 881 7 916 294 period March 2009 to March 2012 which was offering better interest rates. The fixed Accumulated surplus 263 987 931 233 556 286 only presented during the year under review. deposits amounting to P165 million are from previous 274 131 812 241 472 580 The BTA’s turnover fees are confirmed through exposed to cashflow interest risk, however the the audited turnover certificate of the public BTA manages the risk by placing the funds in Liabilities telecommunications operator (PTO), but for short term deposits ranging between 14 and year’s figure of the prior periods the revenue generated from 90 days. Current Liabilities Trade and other payables 33 237 747 14 820 162 these subsidiaries was not included in the Pula 31.66 million. Government of Botswana-Universal certificate. FINANCIAL POSITION Service Fund 35 232 011 34 695 495 The cash generated from operating activities 68 469 758 49 515 657 OPERATING EXPENSES increased by 31.5% from P46.10 million last Operating expenses increased by 19.2% to Pula year to P60.63 million during this year. Thus, Total Equity and Liabilities 342 601 570 290 988 237 83.16 million compared to Pula 69.71 million the BTA has adequate resources to finance its in the previous year. Expenditure increased operating activities and the anticipated capital Statement of Cash Flows Cashflow from Operating Activities mainly due to increase in consultancies and expenditure in the financial year 2013/14. Cash generated from operations 53 223 922 39 682 926 employee costs. The BTA adopted a clean Finance income 7 409 284 6 417 757 60 633 206 46 100 683 Cashflow from Investing Activities Purchase of property, plant and equipment (5 240 871 ) (7 337 787 ) REVENUE vs EXPENDITURE Sale of property, plant and equipment 977 252 559 029 Net cash from investing activities (4 263 619 ) (6 778 758 ) 150 Cashflow from Financing Activities Movement in Government of Botswana REVENUE Universal Service Fund 536 516 1 032 063 SOURCE Dividends paid (7 916 294 ) (6 495 936 ) 100 Net cash from financing activities (7 379 778 ) 5 463 873 Total cash movement for the year 48 989 809 33 858 052 P’Million 50 Cash at the beginning of the year 175 451 383 141 593 331 Total cash at the end of the year 224 441 192 175 451 383 0 2013 2012 Turnover Fees Radio Licence Fees Revenue Expenditure System Licence Fees Service Licence Fees 2 Botswana Telecommunications Authority // Annual Report 2013 3 OUR BUSINESS // THE HISTORY OF BTA Study on the Pricing of Telecommunications Services in Botswana. ITU Secretary General Mr. Yoshio Untsumi officially opened the Beginning of competition and awarding BTA Office. of the first fifteen year mobile licences to Mascom Wireless (Pty) Ltd and Vista Development of the Cellular (Now Orange Botswana (Pty) Telecommunications Technical Ltd. The licences were awarded with a Specifications and Type Approval ten (10) year exclusivity period. Procedures. Development of the Telephone Numbering Policy and the 2002 Spectrum Management Strategy. Study on Further Liberalisation of 1998 the Telecommunications Market in Botswana that led to the August 2006 Minister’s pronouncement on the lifting 2008 of the restriction on the provision of Allocation of the Fixed Wireless Access Hosting of the Telecommunications VoIP by Value Added Network Service Spectrum and the Development of a Regulators Association of Southern Providers and permission for mobile Cost Model and Pricing Framework for Africa (TRASA) Programme office. BTA operators to self-provide transmission Communications Services in Botswana. moved into its own building (The links. current office). National Roaming was Approval of the Telecommunications Act suspended. BTA issued two rulings of 1996 [No. 15 of 1996]; Establishment directing Botswana Telecommunications of the Botswana Telecommunications Corporation (BTC) to provide leased Authority (BTA) and the beginning of line capacity to two Internet Service Development of the Telephone 2010 liberalisation of the telecommunications Providers (ISPs). 2004 Numbering Plan and Draft Universal market. Service and Access Policy. Parliament passes the Communications Regulatory Authority Act. The 2000 Act provides for the regulation of 1996 2006 Telecoummunications, Broadcasting, Postal and Internet services under a converged environment. 2012 1997 2007 Setting up of the BTA with the assistance 2003 Introduction of the Service Neutral 2011 of the Swedish Management Group BTC was granted a fifteen (15) year Licensing Regime leading to the birth Directive on the implementation of (SMG) and publishing of the tender for licence. BTA issued Interconnection of the BTC mobile phone service arm the Recommendations of the Cost the procurement of mobile telephone 1999 Guidelines and the first interconnection 2005 -beMOBILE. Model and Pricing Framework for Licensing of the first two commercial services. ruling between Botswana Installation of the Automated Frequency Communications Services in Botswana FM Broadcasting Radio Stations; Yarona Telecommunication Corporation (BTC), Management System (AFMS) which leading to the reduction of wholesale FM and Gabz FM. BTA awarded the first Mascom Wireless and Orange Botswana. simplifies many of the responsibilities and retail tariffs. Internet Service Providers’ licences. of radio Frequency Spectrum administration such as licensing, engineering analysis, frequency assignment and monitoring. Study on 2001 Cost Model and Pricing Framework Implementation of the new seven for the Telecommunications Market in digit-numbering plan. The International Botswana. Telecommunication Union (ITU) conducted a study on the BTA and declared it a best practice model for regulators and policy-makers to emulate. 2009 Official opening of the spectrum monitoring facility - The Spectrum House. Market study of the telecommunications sector in Botswana and the beginning of the Mobile Phone Sim-cards Registration requirement. 4 Botswana Telecommunications Authority // Annual Report 2013 5 GOVERNANCE // With the effective cooperation of all stakeholders and the right balance of regulation, together we as stakeholders will maximise the immense benefit to the people of Botswana. Corporate Governance We subscribe to high ethical standards and place strong emphasis on outstanding corporate governance.