The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CABLE Bahamas is “not ecstatic” that URCA will require another three months post-consultation end to decide whether to approve its application for a 27 per cent SuperBasic increase, as this will cost it another $1.92 million in estimated revenues.

Noting that the BISX-listed communications provider had first applied for the $8 monthly price increase in December 2011, David Burrows, Cable Bahamas’ head of marketing, said the Utilities Regulation Competition Authority’s (URCA) timeline meant it would likely be mid-January before a final verdict came.

This would be some 13 months after the application was first submitted, and based on an $8 monthly increase, 80,000 customers and that timeframe, Mr Burrows said Cable Bahamas had foregone potential revenues of $8.32 million due to the process.

Responding to suggestions made by consumers at last week’s Town Hall meeting that Cable Bahamas should focus on cutting internal costs first before approaching them for a rate increase, Mr Burrows said many SuperBasic-related expenses were outside the company’s control.

Apart from vehicles, gasoline and utilities, which had all increased dramatically since SuperBasic’s $30 monthly price was introduced in 1994, Mr Burrows said Cable Bahamas’ programming costs had increased by 251 per cent in the 18 years since then.

And, with Cable Bahamas’ customer focus groups providing the “resounding consensus” that they wanted the company to provide services equivalent to what was available in the US “before they get it”, Mr Burrows said the key question was: “What kind of service do we want to have?”

URCA executives announced last week that it would take another three months following Friday’s consultation closure to decide whether to approve Cable Bahamas’ application, and Mr Burrows said: “I wouldn’t say I’m ecstatic over a delay like that.

“When you consider that we put the application in last December, since then we’ve missed out on a significant amount of revenue. The impact that will have on our numbers, not being able to have that revenue over that 12-13 months, that’s a significant amount of revenue we would not have realised.

“Having a speedy decision, speedy tunraround, is critical to the organisation. Having been asked this question, I don’t think that [a three-month delay] would be the most ideal situation for the organisation.”

On the costs front, Mr Burrows said Cable Bahamas had expanded its vehicle fleet since 1994, but noted that within the past three years duty rates on trucks had increased from 50 per cent to 84 per cent. Gasoline costs had risen at least 100 per cent over that time, and the company had spent $350 million to maintain and enhance its network.

“Those are real costs, and we have to pay creditors, we have to pay the banks,” Mr Burrows told Tribune Business. “Signals costs have risen 251 per cent between 1994-2011. They’re going to go up again. I have about six contracts on my desk, some of them looking for 100 per cent increases. I have to make a decision; do I keep them?

“What kind of service do we want to have? In customer surveys and focus groups, the resounding consensus was they want Cable Bahamas to provide the services they get in the US before they get it. To do that, we have to keep pace.”

Comparing Cable Bahamas’ SuperBasic product to the same services offered by the likes of Comcast, DirecTV, Xfiniti and Cogeco, Mr Burrows said the Bahamian firm was “anywhere from $23-$24 below that cost to $33 below that cost for that exact service”.

He told Tribune Business: “The reality is: Do we want that or not? Do we want to have this access as a country? That is the question that needs to be asked. If we don’t want it, then it’s a completely different scenario. If we want it, it has to be paid for.

“I don’t know of any organisation in this country that has not felt the brunt of all these cost increases over the last 12 years. If there is an organisation that runs efficiently, it is Cable Bahamas.”

Mr Burrows said Cable Bahamas had been attempting to ensure its subscribers “understand what is at stake” and deal with “misconceptions” about it and the SuperBasic application.