Revenue fell 22.5% to P376.1 million from P485.6 million in the previous financial year, leaving the state-owned telecommunications infrastructure provider well short of the P600 million revenue target set under its now-concluded UNLEASH 2025 strategy. The company attributed the decline to intensified competition, customer downgrades and margin erosion across its core product lines.
The deterioration was particularly pronounced at the operating level. Gross profit declined by about 10% to P124.8 million from P138.5 million, while operating profit collapsed by 97.6%, from P22.7 million to just P539,181.
BoFiNet's ability to remain profitable therefore came despite a sharp contraction in its core operating earnings. Profit for the year increased to P26 million from P12.2 million in 2024, but this was supported by a P21 million deferred tax benefit. Investment income also increased to P11.5 million from P8 million, while finance costs rose substantially to P7 million from less than P1 million as the company took on additional borrowing.
The contrast between the company's reported profit and its operating profit is significant. Operating profit represented only about 0.1% of revenue in 2025, compared with 4.7% a year earlier, highlighting the extent to which the decline in revenue and continued cost pressures affected the underlying business.
BoFiNet's cost base remained substantial. Other operating expenses increased to P228 million from P211.6 million, despite the decline in revenue. Employee costs rose from P119.1 million to P127.9 million, while IT expenses increased to P20.1 million from P13 million. At the same time, direct costs of providing services fell sharply from P187.6 million to P103.4 million, helping to cushion some of the pressure created by lower revenue.
The pressure on revenue was closely linked to a structural change in Botswana's telecommunications market. Satellite connectivity entered the market in August 2024, while established competitors increased investment in their own infrastructure. BoFiNet said this was accompanied by an average annual price erosion of 24% across its core products.
The company's product performance reflected that pressure unevenly. Revenue from International Private Leased Circuits fell to P34.3 million from P43.3 million, while National Leased Lines moved in the opposite direction, rising to P182.6 million from P128.2 million. Tower colocation generated P19.9 million during the year, providing an additional revenue stream beyond BoFiNet's traditional connectivity products.
Operationally, the company continued to maintain a large national infrastructure footprint. BoFiNet connected 206 villages to its national fibre backbone, expanded Fibre-to-the-Home infrastructure to 17,586 homes and maintained approximately 71% fixed broadband penetration. Its network recorded 99.7% service availability during the year.
The company also recorded several commercial wins as it attempted to offset weakness in its core wholesale products. These included a P3.6 million private-sector MPLS contract running for 36 months, as well as Wi-Fi projects worth a combined P6.6 million. The projects included deployments for government ministries and parastatals and a public Wi-Fi rollout by the Botswana Unified Revenue Service across 17 border posts.
BoFiNet's infrastructure also remained relatively reliable, with its carrier-neutral Digital Delta Data Centre recording 99.9% uptime. The company sees the facility as an important part of its effort to diversify away from increasingly commoditised connectivity services into colocation, cloud hosting and other digital services.
That diversification is becoming increasingly important because BoFiNet's traditional wholesale revenue base is under structural pressure. The company identifies competition from established fibre operators and satellite providers, as well as declining prices for products such as Internet Protocol Transit and International Private Leased Circuits, as major threats to its financial sustainability.
There are also signs of increasing pressure on liquidity. Cash and cash equivalents fell to P3.2 million at year-end from P33.6 million a year earlier, while total borrowings increased to P101.9 million from zero. As a result, BoFiNet's gearing ratio increased from 18% to 30%.
Despite those pressures, the company generated P103 million in net cash from operating activities, although this was down sharply from P248.6 million in 2024. It also continued investing heavily in its infrastructure, with capital expenditure on property, plant and equipment amounting to P194.3 million during the year.
The financial results therefore present a mixed picture. BoFiNet remains one of only five profitable state-owned enterprises in Botswana and recorded its fifth consecutive year without government subvention, but the sharp fall in revenue and near-erasure of operating profit show that profitability alone does not fully capture the pressure facing the business.