The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) has “critically” maintained top-line revenues despite slashing mobile and broadband Internet prices by 20-30 per cent post-privatisation, its majority shareholder said yesterday.

Pledging more price cuts for Bahamian subscribers prior to the planned liberalisation of the cellular (mobile) market in April 2014, Cable & Wireless Communications (CWC) top executives said BTC was now performing “better than the US mainland” when it came to dropped calls.

Lauding the “1,000-fold” increase in BTC’s data traffic since April 2011, when CWC acquired 51 per cent of BTC’s equity, outgoing chief executive Tony Rice said at that time Bahamians would have “struggled to receive an e-mail in downtown Nassau”.

Addressing a conference call with London-based analysts to discuss CWC’s half-year results for the financial year to end-April 2014, Mr Rice said BTC customers were now able to watch their favourite TV show or an NFL game on their cell phone thanks to the post-privatisation network/product improvements.

And Tim Pennington, CWC’s chief financial officer, said BTC was “well on track” with further reductions that would bring consumer prices into line with those levied by its LIME regional affiliate in the Cayman Islands and Barbados.

The goal, Mr Pennington added, was to achieve this prior to the lucrative Bahamian cellular market finally being opened up to competition post-April 2014.

The CWC conference call’s section on the Bahamas amounted almost to a justification of why BTC should have been privatised via the sale of a majority stake to private sector partner.

Neither Messrs Rice or Pennington, or the assembled investment analysts, made any mention of the Christie administration’s bid to regain BTC majority control via taking back an extra 2 per cent of the shares, which would give the Government a 51 per cent stake. The issue appears to have dropped off the radar again, at least as far as the markets are concerned.

Setting out CWC’s achievements with BTC since April 2011, Mr Rice said: “In the Bahamas, we acquired the majority stake in BTC two-and-half years ago, and we’ve made good strides in terms of improvement to the products and quality of service provided by the company.

“We’ve substantially reduced prices for the Bahamian people, with mobile, voice and data prices down by at least 20 per cent and 30 per cent, respectively, but we’ve, critically, held our revenues as customers have increased their range and level of usage.”

Mr Rice produced statistics showing BTC was “delivering better value for our customers”, with mobile (cellular) voice and data prices down by 20 per cent and 30 per cent, respectively.

BTC’s broadband Internet prices had also fallen by 30 per cent, and it was now offering discount packages to its international fixed-line customers.

“In terms of the service, the infrastructure and the service, there’s been dramatic improvement,” Mr Rice said. “Dropped calls have fallen from any level between 12 per cent and 10 per cent down to levels better than mainland US.”

CWC produced figures showing calls dropped by BTC’s network had fallen to levels less than 0.5 per cent of the total.

And Mr Rice added: “Data traffic has increased 1,000-fold from 2 Giga Bytes (2Gb) per day to 2 Terra Bytes (2Tb) per day over the past two years.” Broadband speeds were also shown to have improved from 512 kilo bytes per second to 8 mega bytes per second post-privatisation.

With BTC having installed a 4G (HSPA+) network to replace the 2G infrastructure inherited by its majority shareholder in 2011, Mr Rice said the introduction of Long Term Evolution (LTE) technology pre-Christmas 2013 would further boost customer service by offering them download speeds around 10 times’ faster.

“BTC is continuing to progress as we prepare for competition,” Mr Rice said. “LTE there is closer to launch, which will deliver a world-leading mobile experience to customers prior to competition entering the market sometime next year.

“We’re well on track. When we came into this market, customers would struggle to receive an e-mail in downtown Nassau. Now, thanks to the improvements we’ve made, the same customer can watch their favourite TV show or NFL game on a mobile device in downtown Nassau.”

CWC identified the Bahamas, alongside Jamaica, Barbados and the Cayman Islands, as one of its four key markets in the Caribbean region.

Mr Pennington said CWC anticipated further near-term reductions in BTC’s prices, bringing them into line with average revenue per subscriber (ARPU) in other Caribbean territories, to buttress its market position against Cable Bahamas and other competitors.

“We’ve got to bring prices down in preparation for competition, and Tony has shown that we’ve driven them down pretty aggressively in the last 12 month without slashing revenue and ARPU.

“We need to start doing more of that before we start seeing competition, so our objective is to ensure we leave ourselves with pricing levels that are comparable to Barbados and Cayman, places with comparable ARPU, and we are well on track for that.”

CWC credited BTC’s “strong performance” with helping to drive the 3 per cent first half improvement in group earnings before interest, taxation, depreciation and amortisation (EBITDA) to $298 million.

“Fixed line revenue at $130 million declined by 13 per cent, as a 2 per cent drop in the subscriber base was compounded by an 11 per cent fall in ARPU, driven mainly by rate reductions in Jamaica and the Bahamas, and on lower termination rates across the region,” CWC added of its Caribbean performance.

It is unclear whether BTC will be impacted by the Caribbean-wide restructuring LIME is undertaken, and which has seen an 18 per cent reduction in staff numbers, with payroll down by $18 million.

LIME has outsourced its field services teams in Barbados and Jamaica, with Caribbean operating costs down 6 per cent at $272 million.