Ester Mbathera
Telecom Namibia made a loss of N$12.3 million before tax in the 2022/23 fiscal year compared to a profit of N$51.9 million in the previous year.
This was reported in the Namibia Post and Telecom Holdings (NPTH) 2022/23 financial report released on Tuesday.
According to the report, Telecom Group’s financial performance was impacted by the challenging economic environment, rising inflation and interest rate hikes, local and international supply chain constraints, volatile exchange rates, and increasing competition in the telecommunications market.
The company reported a loss of N$1.2 billion in 2021/22, attributing this to outdated and redundant billing systems that have impacted revenue collection and overall profitability.
At the time, the NPTH committed to ensuring the smooth funding and implementation of Telecom’s capital expenditure projects to address these issues and improve financial performance.
“Telecom Namibia’s Group revenue grew by 1.0 percent year-on-year, putting pressure on profitability and free cash flow. The declining revenue is attributable to all revenue segments except for voice and IT, with mobile revenue reflecting the largest reduction year-on-year,” reads the report.
The report further attributed Telecom’s flat revenue growth to competitors offering advanced technologies, which led to the loss of business opportunities and tenders, poor service delivery and network quality, and limited mobile network coverage.
In 2022/23, the company recorded a closing cash overdraft balance of N$37 million, compared to an overdraft balance of N$10 million in 2021/22.
“The overdraft facilities were used to fund capital infrastructure, particularly mobile radio expansion, WACS undersea cable capacity upgrade, Phase 1 of the mTera DWDM terrestrial transport network upgrade and fibre (FTTx) network expansion in Oranjemund, Rundu and Windhoek to grow the mobile and fixed data revenue streams,” reads the report.
Despite these challenges, Telecom implemented stringent cost management measures, resulting in some administrative savings.
In 2023, the company launched its five-year Integrated Strategic Business Plan (ISBP 2027), which included a funding plan.
The plan aims to stabilise the business, facilitate business transformation, and promote digital transformation.
“The ISBP 2027 and funding plan will enable Telecom Namibia to access funding for its strategic projects to address the aged telecommunications network infrastructure and required mobile and fixed network expansion to support future revenue growth and customer retention,” reads the report.
