The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) has been dealt a $30m blow by Hurricane Dorian with network repairs set to last into 2020, it was revealed last night.

The carrier’s ultimate parent, Liberty Latin America (LiLAC), disclosed that BTC suffered a $5m revenue loss for the three months to end-September 2019 as well as incurring some $25m in damages to systems infrastructure in Grand Bahama and Abaco as a result of the category five storm.

Unveiling its results for the third quarter and first nine months of 2019, Liberty Latin America said some $5m was spent on restoring BTC’s services prior to end-September when the third quarter reporting period closed.

It added that Dorian also delivered an $8m hit to the operating cash flow of Cable & Wireless Communications (CWC), BTC’s immediate parent and a Liberty subsidiary, while the latter was also forced into a $14m one-time write off of property and communications equipment that Dorian “damaged beyond repair”.

Garfield “Garry” Sinclair, BTC’s chief executive, could not be reached for comment before press deadline last night. However, Liberty Latin America revealed in its results announcement: “In the third quarter we spent $5m on restoration related to damage caused by Hurricane Dorian in The Bahamas.

“We currently estimate up to $25m of property and equipment additions, inclusive of the $5m already spent, will be required to restore our damaged networks, which is expected to be incurred during the remainder of 2019 and 2020.”

Liberty Latin America added that Hurricane Dorian’s interruption of normal consumer and business activity on Abaco and Grand Bahama, together with the free roaming and minutes offered to BTC mobile subscribers, resulted in CWC suffering a 2 percent year-over-year “rebased revenue” decline for the third quarter. This “negatively impacted third quarter revenue by $5m”.

And, from an accounting perspective, BTC’s ultimate parent was also forced into “an impairment charge.. of $14m in The Bahamas, related to Hurricane Dorian, to write off the net carrying amount of property and equipment that was damaged beyond repair”.

BTC’s network infrastructure damages were last night revealed to be more than four times’ those of its mobile rival, Aliv, which pegged its own restoration costs at around $6m. Damian Blackburn, Aliv’s top executive, said the operator had almost completed the “secondary sweep” of its mobile network on Abaco and Grand Bahama to determine if any further equipment needed to be repaired or replaced.

“We’re still sort of counting up, but it will be in the order of $6m that we’ve had to spend, most of which is covered by insurance,” Mr Blackburn told Tribune Business. “On the mobile network side we have full coverage in Abaco, the Abaco Cays and Grand Bahama.

“We’ve pretty much completed the second phase of our restoration, which was literally to go and inspect every tower impacted by the hurricane and replace anything that was damaged. That’s pretty much finished.

“It took us nine days to get the whole of mainland Abaco working from having no coverage for a day or so, and Grand Bahama, West End and Freeport were working through, during and immediately after the storm. Within two to three weeks we were pretty much done in terms of restoring coverage and service.”

Mr Blackburn added that several longer-term issues remain to be addressed, especially having to liaise with BTC on where destroyed towers they both used are to be rebuilt and who will be responsible. He added that these sites were “a small number of around a dozen”, and based mainly in east Grand Bahama.

Besides having to contend with Dorian’s wrath, BTC suffered the continued erosion of its mobile subscriber base with the loss of another 4,200 customers during the three months to end-September.

However, this near-2 percent decline occurred at a much slower pace than in the previous period when BTC saw a net 9,300 subscribers leave during the 2019 second quarter.

BTC saw 3,800 pre-paid mobile subscribers, and 400 of the more stable, higher-yielding post-paid subscribers leave during the third quarter, dropping its total customer base from 213,500 to 209,300. It closed September 30 with 184,200 prepaid subscribers and 25,100 post-paid subscribers as Aliv seemingly continues to make inroads into its market share, albeit at a slower pace than before.

Data previously provided by Liberty Latin America showed that, for the 2019 second quarter, a modest gain of 700 post-paid mobile subscribers was more than offset by the loss of another 10,000 pre-paid customers.”

Referring to CWC’s business, Liberty Latin America said: “Mobile subscribers were broadly flat in the third quarter. Jamaica added 23,000 subscribers in the quarter as we continued to build on customer value propositions launched in April. We have now added 85,000 subscribers year-to-date in Jamaica, an improvement of nearly 120,000 compared to the first three quarters of 2018.

“These gains were offset by losses due to continued competitive pressure in Panama and The Bahamas, where we lost 18,000 and 4,000 subscribers, respectively. Mobile revenue was 10 percent lower on a rebased basis compared to the prior-year period, primarily attributable to lower service revenue in Panama and The Bahamas.

“Continued competitive pressure drove decreases in ARPU (average revenue per user) and the average number of subscribers in each market, with an additional impact from Hurricane Dorian in The Bahamas.”

BTC also suffered a 1,300 decline in fixed-line subscribers for its fixed-line services, which includes broadband Internet and telephony. Fixed-line voice and Internet customers fell by 1,200 and 100, respectively, compared to end-June 2019 numbers, leaving the carrier with customer bases of 43,200 and 25,600.

However, BTC did make a net 400 subscriber gain in its TV/video offering, growing this customer base to 6,500. As a result, its net loss of revenue generating units (subscribers) for the 2019 third quarter was kept to 900, although this excludes the mobile business.

BTC closed the third quarter with a total 75,300 subscribers for its TV, Internet and fixed line voice services. Some 128,900 homes are passed by its “two-way” infrastructure.