The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CABLE Bahamas is targeting 33,000 southern New Providence homes for connection to its new fibre-to-the-home network starting in the 2023 first quarter after overcoming supply chain challenges that delayed the roll-out.

Franklyn Butler, the BISX-listed communications provider’s president and chief executive, told shareholders in its just-released 2022 annual report that it had wanted to make faster progress on its new infrastructure but had been thwarted by difficulties in obtaining the necessary equipment in a timely fashion.

“We remain relentless in our pursuit of improving our levels of customer service and quality of network,” he informed investors. “We have now deployed our initial testing of our Nokia 10GB (gigabyte) GPON service here in New Providence and had expected to have made greater progress with this roll out during financial year 2022.

“However, due to supply chain challenges we experienced significant delays in receiving equipment to roll out this network. During financial year 2023, this will remain our biggest area of focus to ensure that we maintain and grow our share of connections with our world class fibre-to-the-home services. The pandemic has demonstrated how important world class connectivity is for the modern day workforce and The Bahamas, as we continue to be a place for digital nomads to want to live and work.”

Affirming that it has committed an $85m capital investment to fibre-to-the-home network roll-out, as it seeks to match its main Bahamas Telecommunications Company (BTC) competitor and improve pay-TV, Internet and mobile service quality, Cable Bahamas said the transition from its legacy hybrid fibre coaxial (HFC) infrastructure will improve revenue yields by opening the door to higher average revenue per user (ARPU).

Besides boosting revenue per subscriber, the BISX-listed communications provider added that greater bandwidth will aid businesses in addition to paving the way for online gaming, home security and managed IT services. In addition to lower operations costs and greater efficiency, Cable Bahamas added that its network upgrades will also pave the way for the potential introduction of 5G (fifth generation) mobile technology in the near future.

“The Optical Distribution Network (ODN) architecture has been finalised,” Cable Bahamas added. “The initial region for the roll-out remains south New Providence, starting in the less dense communities in south-west Adelaide moving eastward along the southern corridor through Coral Harbour to the South Beach development. A total of 33,000 homes have been surveyed and designed and scheduled for build starting in the 2023 first quarter.”

Ross McDonald, the former Royal Bank of Canada (RBC) country head who is now Cable Bahamas’ chairman, said the “unprecedented demand for robust connectivity” driven by the increase in remote working as a result of the COVID-19 pandemic “shows no sign of abating”. He predicted that it will only further increase over the short to medium-term, thereby driving the need for the company’s network enhancement.

“Our response to this new demand for greater bandwidth is our fibre-to-the-home (FTTH) initiative, which we announced last year. We have committed to invest more than $85m over the next two years to connect the estimated 60,000 homes and businesses in New Providence to what will be the fastest and most reliable broadband network in the country and, indeed, in the region,” Mr McDonald wrote in the annual report.

“The successful sale of Summit Broadband provided us with the funds to restructure our balance sheet and continue to support our expansion into the mobile sector through our investment in Aliv. We remain committed to expanding our network where it makes economic sense.

“Over the last year we invested in an expansion of our submarine network into Baker’s Bay in Abaco and down to Norman’s Cay in The Exumas to support the growth we are seeing in some of the most beautiful parts of our pristine country.”

Mr Butler, meanwhile, said net income attributable to Cable Bahamas’ ordinary shareholders for the 12 months to end-June 2022 was a positive $5.1m - an $11m improvement from the net loss suffered in the 2021 financial year. The positive turnaround came despite the company incurring an overall $11.257m net loss for the 12 months to end-June 2022, which related entirely to accounting treatment of the loss suffered by the Government on its Aliv shareholding.

“We closed the financial year 2022 with revenue of $218m, representing growth of 9 percent over the previous year’s $200m, and EBITDA (earnings before interest, taxation, depreciation and amortisation) of $75m for the year, which is approximately 41 percent higher than the $53m from the previous year,” Mr Butler said. “Our balance sheet remained strong with cash balances at $74m and the refinancing of our long-term debt completed with 10 and 15-year maturities.”

Elsewhere, Cable Bahamas touted increased market share and revenues across various business segments. Asserting that it was “winning the fight” against BTC on customer connections, the BISX-listed provider unveiled charts showing that its numbers had roughly doubled from around 139,000 in 2015 - prior to Aliv’s launch - to some 333,000 by its 2022 financial year-end close.

In contrast, BTC’s customer connections were shown as dropping from around 450,000 to below 300,000 over the same period, with Cable Bahamas’ collective market share rising from 49 percent in 2019 to 58 percent in 2022. It added that EBITDA had risen by $22m or 41 percent year-over-year in its 2022 financial year, growing from $53m to $75m. Revenue growth was $18m.

The BISX-listed communications provider said debtor days outstanding improved, or fell by, 38 percent over the two years to end-June 2022, which represented around half a month of operating cash. “Debtor days outstanding declined from 42 days to 26 days between June 2022 and June 2020, resulting in a significant improvement in operating cash flow,” Cable Bahamas said.

“Aliv’s consumer prepaid services are nationally significant, having gained 50 percent market share in less than six years of operation. Aliv continues to grow its portfolio by enhancing the marketability of these products with seven-day prepaid plans experiencing 17 percent annualised growth this fiscal year.....

“Aliv continues to expand the consumer data and analytics solutions to overcome a range of issues like employing subscriber acquisition costs for increased ARPU, which grew by 3 percent year-over-year, and improved consumer returns on investment. The business focused on true consumer differentiation, providing automated revenue optimisation campaigns and pricing solutions which drove $1m in incremental revenue.”

Cable Bahamas said total Internet subscribers, some 58,000 at end-June 2022, were higher than the 54,000 recorded prior to Hurricane Dorian in September 2019. It also boasted of 50 percent market share in fixed-line voice, and 15 percent growth in business-to-business (B2B) revenues over the two years since 2020.