The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas plans to invest $80m over the next two-three years on rolling out its New Providence fibre-to-the-home network, its top executive has revealed.

Franklyn Butler, the BISX-listed communications provider’s president and chief executive, told Tribune Business it was working to finalise its roll-out strategy for the country’s most populated island as part of efforts to improve customer connectivity and data access post-COVID.

“We are right in the thick of really making a commitment to fibre-to-the-home for New Providence,” he disclosed. “We’re doing some now, and we’re really trying to finalise that now so we have a more comprehensive strategy for fibre-to-the-home for New Providence.

“We’ve already rebuilt 90 percent of Abaco, and are putting fibre-to-the-home in there. We are really aggressively connecting out there, and ratcheting up our level of support for Abaco.” As for the nation’s capital, Mr Butler affirmed that Cable Bahamas is planning to invest “somewhere around $80m” in upgrading its network infrastructure to fibre-to-the-home.

“We plan to do that over the next two to three years,” he added. “Our focus with providing that is we’ve got to make sure customers, coming off the pandemic, it’s really important that they have the right level of connectivity and access to data.”

Mr Butler said Cable Bahamas’ fibre-to-the-home priorities are New Providence, its largest customer market, and Abaco post-Hurricane Dorian. As to whether the technology will be deployed to other islands where the company operates, he replied: “I think we’d like to do it wherever else we operate but our focus is on New Providence and Abaco at the moment.

“That will keep us busy for quite some time, and depending on what happens with hurricanes, we’d love to upgrade Eleuthera and Grand Bahama but those are not our priority at this stage in the game. Abaco and New Providence are our core areas of focus.”

The Cable Bahamas chief spoke out after the group’s annual 2021 financial statements revealed a net loss of just over $28m due solely to the continued ‘red ink’ generated by its mobile subsidiary, Aliv.

The latter suffered a near-$41m loss for the year to end-June 2021. Cable Bahamas holds a 48.25 percent equity stake, and Board and management control, in the mobile phone operator which ended the Bahamas Telecommunications Company’s (BTC) monopoly, but Mr Butler reiterated that shareholders need to be patient for the Aliv investment to pay off.

Aliv’s revenues rose 8.5 percent year-over-year to $83.314m, compared to $76.811m for the year to end-June 2020, and the Cable Bahamas chief added: “Aliv’s growth continues. The Aliv story has been a lot of capital up front, and we financed that through debt.

“As revenues grow on the mobile side, EBITDA (earnings before interest, taxation, depreciation and amortisation) and net income will continue to grow. We don’t anticipate any raising of new financing.”

Aliv’s operating expenses, meanwhile, remained flat at $70.558m for the 12 months to end-June 2021 as opposed to $70.834m in the prior year. What drove Aliv to its net loss was continued interest expense on the debt incurred to build-out its nationwide mobile network infrastructure, plus the depreciation and amortisation charges associated with this capital investment.

They stood at $19.886m and $26.517m, respectively, combining to account for $46.4m worth of expenses. This compared to over $42m in 2020, and Mr Blackburn said these numbers would reduce over time as Aliv increased revenues and paid down its debt. “Our plan is to keep knocking it down,” he added.

Also impacting Cable Bahamas’ results is the accounting requirement to consolidate the Government’s losses with its own. By virtue of its 51.75 percent equity stake, the Government’s share of Aliv’s 2021 financial losses was pegged at $22.107m in 2021.

That represented a 17.3 percent decline from the prior year’s $26.573m share of the mobile operator’s ‘red ink’, with the Government having suffered a collective $70.403m loss over the near-five years since Aliv launched in November 2016.

Mr Butler, though, said Cable Bahamas was moving in the right direction. “If you look at our last four to five quarters, you can see a pattern of EBITDA growth,” he told this newspaper. “This quarter was another example of growth of revenue and EBITDA, with revenues up 11 percent versus last year and we see a fair amount of upside going forward.”

Cable Bahamas’ 2022 first quarter results indicate that both group and Aliv’s performance have improved subsequent to the 2021 year-end with the mobile operator likely losing around $8m for the period based on the $4.522m hit taken by the Government.

And, while Cable Bahamas suffered a $2.009m group net loss for the three months to end-September 2021 based on having to incorporate the Government’s loss in its accounts, that represented a 64 percent year-over-year reduction on the $5.524m impact suffered in the 2020 first quarter.

The communications provider’s share of Aliv’s losses also appears to have been dwarfed by profits from its other business segments, as “net and comprehensive income” attributable to its own operations stood at $2.513m.

Mr Butler, meanwhile, based his optimism on the economy’s continued re-opening from the COVID-19 pandemic and the end to the nighty curfew after almost 20 months. He added that “business solutions” clients likely accounted for around 20 percent of Cable Bahamas’ clients, and hotels some 10 percent of its customer base.