BTC privatisation halfway
BUSINESS| Aug. 21, 2012, 12:57 p.m.
By John Churu, Gaborone, Botswana
Part two of three critical stages of the privatisation of the Botswana Telecommunications Corporation (BTC), which is the registration of a state company to manage the telecommunications backbone currently held by the utility, is nearing completion.
Briefing journalists, Transport and Communications Minister, Nonofo Molefhi said that Cabinet has identified the telecommunications infrastructure that the company, a Special Purpose Vehicle (SPV), will control.
As registration of the SPV continues, the minister revealed that the BTC would initially bankroll the infrastructure company until such a time it could be taken away and become self-liquidating.
"The SPV is part of the BTC's privatisation and the corporation has some funds that will, for the time being, facilitate this SPV," he said in response to Business Week enquiries at the media briefing. "When the time comes for us to separate the functions and other resources, we may need government to provide subventions.
"For the time being, however, the entire process is being done by the BTC to help it stand on its own feet."
The registration, separation and establishment of the SPV forms the second stage of the BTC's privatisation being intended to distinguish between the BTC as a retail service provider from its former role, which also included wholesale activities. The third and final stage involves the issue of BTC shares to the public and the utility's listing on the Botswana Stock Exchange.
After completion, the second stage sees the BTC competing with Mascom and Orange in service provision, with all players procuring network space from the SPV. "Government's intention is to create a level playing field within the telecommunications sector to encourage efficiency in delivery of services and diversification of products as well as to reduce prices and tariffs through fair competition," Nonofo said.
According to the minister, "The decision on the form of separation of the identified network assets and operations from BTC Limited to the new infrastructure company gives momentum to the implementation of stage two of the privatisation process."
Some of the assets approved by Cabinet for the SPV include the Trans-Kalahari Optical Fibre, and other similar systems, the Dense Wave Division Multiplex fibre system and both the Eastern Africa Submarine Cable System (EASSy) and the West Africa Cable System (WACS).
Government linked the country to both EASSy and WACS in the last two years at a combined cost of about USD43 million, bringing lightning speed, reliable and high capacity internet services to local users.
However, the minister warned that the separation of the SPV's assets and business processes could take time, potentially between 18 and 24 months. "It may take a while because there are other key stakeholders and we require buy-in in all processes," he said.
"There are human faces in this - being people working for the BTC - and during separation some will go to the new company together with the assets and services. Our engagement with the unions is ongoing so that they understand the extent of the process and the packages in terms of what product goes where, and the jurisdiction of the services provided."
Most of the SPV's staff will come from the BTC, with the newly appointed board and executive management making up the full personnel structure. Special Purpose Vehicle board of directors (SPV) board consist of Board Chairman Ratsela Mooketsi and board members are Malebogo Mpugwa, Dr Pauline Sebina, Marvin Torto, Letsebe Sejoe, Ditirwa Mphoeng, and the acting CEO is Keabetswe Segole.
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