Botswana’s telecom regulator, Botswana Communication Regulatory Authority (BOCRA), recently enforced stricter Know Your Customer (KYC) rules requiring all SIM cards to be registered. Botswana Telecommunications Corporation (BTC), which has about 18% of users in the country, said this has had an impact on its customers.
What we have seen as BTC is that SIM registrations have had an impact on subscriber rates.
Acting CEO Boitumelo Paya told investors and analysts when presenting financial results.
If you are number two or three, people prioritized their number 1 sims, this is baked into the company’s numbers.
She said.
Out of the three phone companies in Botswana, BTC is the third biggest.
Because Mascom and Orange started first in the market, most people use their SIM cards. When people rushed to register their SIM cards to follow KYC rules, many chose to keep their older numbers known to their contacts. This meant some people stopped using their BTC SIMs, and those lines were cut off.
For BTC, the big question now is: since they have fewer customers, how much money can they make from each one? Hence, Paya said the focus is on the average revenue per user. With fewer subscribers actively using BTC’s services, the company focuses on increasing average revenue per user (ARPU).
What is ARPU?
It’s a common telecom measure showing how much money a company earns from each customer on average. Instead of only growing customer numbers, BTC wants to grow the money made from each customer.
How?
Paya said through:
- Superior network quality,
- Elevating customer experience,
- and driving commercial activity.
“We are staying close to our customers. We are shaping our commercial focus and investing where it matters most,” Paya said.
He added that “part of it was we need to say this space is competitive, and our market share needs a boost, and we are aware that we need to push past KYC”.
Where are the gaps?
Paya acknowledged BTC’s coverage gaps.
“We are aware that our network sometimes is not optimal, it’s congested.”
The company invested P277 million in its infrastructure to improve its internet connectivity experience. Part of this was to move its customers from copper to fibre, which management said increases speed. The company has been the widest in terms of 2G coverage, but lagged with 4G, which it is now improving through investments.
BTC’s Acting Chief Financial Officer, Abel Bogatsu, said the company bought new network signal rights to improve its coverage. He explained that this allows BTC to cover a bigger area from just one tower, unlike before.
We will be paying P22 million a year for it, Bogatsu explained. Against this background, Paya said they “are positioned for sustainable growth”.
Paya said they have seen improvements in how happy customers are with their service. Paya said sometimes they adjust their prices to try to keep customers loyal. In her observation, today’s customers think about what they can afford. Paya acknowledged that when customers see BTC prices, some feel they are too high. So the company has to make sure customers get good value for their money.
BOCRA recently gave advice on what it thinks is the real cost of providing services to the market. For BTC, Bogatsu said this means they now have to check their prices to make sure they stay competitive.
“We are in a very competitive market. And now the market knows where the costs are, it’s going to put pressure on us to look at our prices and see whether we can bring them down,” Bogatsu said.
Boosting Customer Spend
BTC is focused on giving customers more options for services once they join, which can increase average revenue per user.
Once the person is in, what can you offer them? So that the average revenue per user grows.
Paya noted
BTC is developing several products to increase spending per customer, including:
- Mobile money services
- Loans
- Insurance policies
- Wealth management products
- Mobile electricity purchases
BTC made its mobile money service better to help keep people using its SIM cards. Mobile money is extra to a normal SIM card that is only used for calling. As part of their plan, BTC is working with local councils. This allows council workers to use BTC’s mobile money services to make payments. The goal is to build stronger relationships with customers and give them more reasons to keep using BTC.
Paya admits the telecom market is sensitive, and “these are the steps we can take to keep customers,”.
Because if you cannot get the number of subscribers, the opportunity in terms of revenue growth should come from average revenue per user.
Paya said
As an example, some people have fixed broadband (FBB) at home, and when they combine it with mobile data, BTC will earn more money from each customer in the future.
