The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Pay-TV subscribers suffered their lowest annual decrease for six years in 2022 with all other communications segments reporting a modest increase in consumer numbers, sector regulators have revealed.

The Utilities Regulation and Competition Authority (URCA), unveiling its 2022 annual report together with its plan for 2023, disclosed that pay-TV subscriber numbers did not repeat the prior period’s double-digit fall as they dropped by 2.9 percent year-over-year - falling from 55,534 in 2021 to 53,909 last year.

“Cable Bahamas retains the position as the leading provider for pay-TV services in The Bahamas, notwithstanding BTC’s challenge commenced in 2016 with its provision of TV services to selected islands,” URCA said.

“Pay TV subscriptions had the lowest year-over-year percentage decrease since 2017 with a 2.9 percent decrease from 2021 to 2022. When compared with the 11 percent decline from 2020 to 2021, the number of pay TV subscribers ending their subscriptions significantly slowed down in 2022.”

Data showing the decline in pay-TV subscribers has slowed comes amid Cable Bahamas’ arguments that its ‘significant market power’ designation in the pay-TV market is “screaming for removal”, with competition from streaming services having caused an 11 percent plunge in subscriber numbers in 2021.

The BISX-listed communications provider, in its response to URCA’s consultation on the draft annual plan for 2023, sought to make the case for a softening of its regulated status given the inroads made by the likes of Netflix and Hulu.

Asserting that URCA’s long-promised review of the pay-TV market and other fixed services is “critical”, it added that its core heritage product had “shown the steepest decline in subscribers at 11 percent year-over-year. The review has implications for the Significant Market Power (SMP) designation, which is screaming for removal with the competition from the grey markets such as Netflix, Hulu etc. and the addition of competition in this market since 2016.

“This review has been listed and subsequently cancelled on an ongoing basis since 2018. When reviews are consistently postponed, data collected for the purpose of the review becomes stale dated and must be collected again. At the present time Rev (Cable Bahamas) is not optimistic that the review will be completed with a final statement of results by the third trimester of 2023 as indicated by URCA,” the BISX-listed communications provider added.

“The group calls for the escalation of this review in the plan so that it can be addressed with the urgency which it deserves.” Cable Bahamas has long been designated as having SMP in the provision of pay-TV services due to its dominant majority market share, which was built up over a 15-year exclusivity, and the Bahamas Telecommunications Company (BTC) only a relatively recent rival to enter the sector.

Companies with SMP designations are subject to close regulatory scrutiny and controls because their dominant market position means they can potentially adopt practices that squeeze out competitors to the detriment of consumers. Cable Bahamas’ submission is essentially advocating that it be subjected to less onerous restrictions in that segment.

But, while URCA made no mention of any adjustments to Cable Bahamas’ pay-TV status, it did confirm it has eliminated the SMP designation for BTC in the provision of mobile phone services due to the competitive inroads made by Aliv, Cable Bahamas’ affiliate.

“URCA has concluded that competition in the mobile market has resulted in a maturing competitive market, removing the Significant Market Power designation from the incumbent, BTC,” Randol Dorsett, URCA’s chairman, said.

“This level of maturity, coupled with the comprehensive assessment of the evolution of the mobile market, post-liberalisation, positioned URCA to provide a report to the Government to assist with informing government’s decision on whether further market liberalisation should be considered at this juncture.” That is a reference as to whether The Bahamas should permit a third mobile operator, but there was no mention of any decision.

“In 2022, after a comprehensive review of the mobile telephone market, URCA removed BTC’s designation as a significant market power (SMP) operator and determined that neither Aliv nor BTC has SMP in mobile,” URCA added.

“Overall, the number of mobile voice subscribers increased by 1.66 percent in 2022 after two years of decreases. Simultaneously, mobile voice penetration for 2022 versus 2021 rose slightly by 0.61 percent from 101 to 101.61 mobile voice subscriptions for every 100 persons.” Mobile voice subscriber numbers rose by 6,500, jumping from 397,393 to 403,993 year-over-year, with the latter representing the second-highest figure since market liberalisation in late 2016.

Mobile voice penetration was at its third-highest ever, having come down from the 110.40 subscriptions for every 100 persons peak in 2019. Turning to mobile-only data services, URCA added: “Mobile data only service relates to users who subscribe only to mobile broadband services with no mobile voice or SMS messaging services included.

“This is done via dedicated SIM card with a smart phone, tablet with 3G/4G connectivity or a USB dongle. The year-over-year increase for 2021/2022 was 1.5 percent representing a significantly smaller increase than in 2020-2021 and 2019-2020.” Mobile data only subscriber numbers rose from 32,834 in 2021 to 33,327 the following year.

As for broadband Internet services, URCA said: “Overall fixed broadband subscribers increased from 82,217 (2021) to 84,022 (2022) representing a 2.2 percent increase and the highest number since 2017. The fixed broadband penetration rate increased to 21.13 subscriptions for every 100 persons from 2021’s rate of 20.90.

“For the first time in the past six years, there was a year-over-year increase in fixed voice telephone subscribers with an increase of 0.91 percent from 2021 to 2022. However, the penetration rate decreased from 21.78 to 21.75. Overall, there has been a steady decline in fixed voice subscriptions. BTC and Cable Bahamas are the two fixed voice service providers.” Subscriber numbers rose from 85,705 to 86,484.