The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) will not receive an insurance payout to cover the $25m of network infrastructure damage inflicted by Hurricane Dorian, it has been revealed.

The Bahamian carrier’s immediate parent, Cable & Wireless Communications (CWC), revealed in its 2019 third quarter results that the extent of the devastation did not exceed the deductible in its coverage policy.

As a result, it confirmed that BTC will be receiving no outside financial assistance to help cover the restoration work on Abaco and Grand Bahama, and will have to fund this from its own - and its parent’s - resources.

CWC added that Dorian had potentially impacted some 30,200 homes passed by BTC’s fibre-to-the-home infrastructure, or 23.4 percent of its 128,900-strong potential customer base. On the mobile side, 40,900 subscribers or 19.5 percent - nearly one in five of its total 209,300 clients - were caught in the area devastated by the category five storm.

“We currently estimate up to $25m of property and equipment additions will be required to restore the damaged networks in The Bahamas, of which approximately $5m has been incurred as of September 30, 2019,” CWC said in its regulatory filings. “We expect our restoration work to continue into 2020.”

Turning to BTC’s insurance situation, it added: “The amounts payable under our weather derivative did not exceed the deductible threshold. As such, we will not receive a third-party payment to cover this damage.

“While our assessment of the losses attributable to Hurricane Dorian is ongoing, our preliminary evaluation has resulted in a $14m impairment of fully damaged or destroyed assets, primarily property and equipment. During the three and nine months ended September 30, 2019, the effects of Hurricane Dorian negatively impacted our revenue and operating cash flow by an estimated $5m and $8m, respectively.

“Although these negative impacts will decline as the networks are restored and customers are reconnected, we expect that the adverse impacts of Hurricane Dorian on our revenue and operating cash flow will continue through the remainder of 2019 and beyond.”

CWC said BTC’s numbers for subscribers and homes impacted were based on data it possessed at August 31, 2019, just as Dorian struck the northern Bahamas. “We are still in the process of assessing the impact of the hurricane on our networks and subscriber counts,” CWC added.

“The impacted areas in The Bahamas include approximately 30,200 homes passed; 7,700 telephony RGUs (revenue generating units); 3,800 Internet RGUs; 900 video RGUs, 4,400 postpaid mobile subscribers and 36,500 prepaid mobile subscribers.”

Balan Nair, chief executive of Liberty Latin America (LiLAC), CWC’s parent and BTC’s ultimate controlling 49 percent owner, previously said Abaco had suffered “a huge humanitarian disaster” as a result of the category five storm.

While Abaco was “not one of our bigger revenue stream islands”, Mr Nair said it would likely take BTC and its parents into 2020 to completely restore communications services.

“On Hurricane Dorian, we think some time next year we’ll get back to pre-hurricane levels,” Mr Nair said. “There is two parts to the story. First, Grand Bahama island, where we are focused, where we are completely rebuilding there, and getting there.

“A lot of our B2B (business) customers have come back, our fixed networks are being built and our mobile network is being stood up. Then there’s the other island, Abaco, where it’s really a huge humanitarian disaster there.

“There’s hardly any commercial activity but that will come back. That may take a little bit longer but it was not one of our bigger revenue stream islands anyway. But we are focused on bringing some new technology there that we can use to reduce construction costs; a lot more fixed wireless. I feel good about The Bahamas; I feel really good about my team as well and how we responded to that.”