Paratus Namibia: 20 Years of Connectivity, Navigating Inflation, and Preparing for Mobile Domination!
It's been two decades since a small team with a big vision set out to revolutionize Namibia's digital landscape. Now, as Paratus Namibia celebrates its 20th anniversary, we see how far they've come. What began as Internet Technologies Namibia (Pty) Ltd has blossomed into a major player in the connectivity game, and they're gearing up to launch their mobile network. This is a story of growth, resilience, and the challenges of doing business in a dynamic economic environment.
In May 2024, Paratus successfully completed a rights issue, which fueled one of their most ambitious network expansions to date. The rollout of their Radio Access Network and the expansion of their retail presence to 18 outlets have resulted in a surge in customer adoption across their services. Let's break down the impressive numbers:
- Fibre connections saw a 34% increase, adding 3,551 new subscribers.
- LTE post-paid subscriptions soared by 108%, welcoming over 3,000 new customers.
- Sky-Fi experienced an incredible 184% growth, with over 8,200 new subscribers.
- The Armada Data Center reached 62% occupancy.
But that's not all! Paratus also significantly expanded its mobile base stations by 256%, achieving coverage for over 70% of the population. This expansion is crucial, as it lays the groundwork for their upcoming mobile network launch. This is a significant step, and it will be interesting to see how it impacts the market.
For the fiscal year ending June 30, 2025, Paratus invested a whopping N$471.3 million in infrastructure – more than double the previous year's investment. A significant portion of this, N$381.2 million, was allocated to the mobile project, encompassing equipment, site construction, and a new digital software stack. Overall, group capital expenditure jumped from N$216.1 million in 2024 to N$471.3 million in 2025, driven by preparations for the mobile business launch in September.
Despite facing economic headwinds, including high inflation, exchange-rate volatility, and the financial repercussions of a cyber incident, Paratus still managed to achieve a revenue growth of 14.58%. This was driven by increased fibre, Sky-Fi, and LTE subscriber numbers, higher sales from the Equiano subsea cable capacity, and stronger Armada Data Center occupancy. This is a testament to their adaptability and strategic focus.
However, the expansion and mobile business development came at a cost. Operating profit decreased by 41.36% to N$66.1 million as expenses rose. EBITDA margins dropped from 39.8% to 31.2%, and gross profit margins narrowed to 47.68%. This highlights the inherent challenges of rapid growth and investment in a competitive market.
Earnings were also affected by a larger number of shares in issue following the rights offer. Basic earnings per share decreased from 47.49 cents to 26.29 cents, while HEPS experienced a rise from 47.25 cents to 26.28 cents.
Paratus Namibia's total revenue increased by 15.8%, reaching N$646.4 million. Impressively, recurring revenue made up 89.2% of the total. The revenue growth was fueled by Equiano subsea cable services, increased Armada Data Center occupancy, and expanded fibre, LTE, VSAT, and Sky-Fi product uptake, as well as N$12.8 million earned from mobile project-related revenue.
But here's where it gets controversial...
While the growth figures are impressive, the decline in operating profit and margins raises questions about the long-term sustainability of this rapid expansion. Is Paratus overextending itself?
And this is the part most people miss...
It's important to consider the impact of inflation and exchange-rate volatility on their financial performance. These external factors can significantly impact profitability, and it will be interesting to see how Paratus navigates these challenges in the coming years.
What do you think?
Do you believe Paratus can maintain its growth trajectory despite the economic pressures? Share your thoughts in the comments below! Do you think their mobile network launch will be successful? What other factors could impact their future performance? Let's discuss!
Andrew Hall
