Published On:Thursday, March 18, 2010

By NEIL HARTNELL

Tribune Business Editor

CABLE Bahamas yesterday said it reduced 2009 operating expenses by 8 per cent better than budget, aided by electricity costs that were 20 per cent lower than expected, the only area where it "took a bit of a hit" from the recession being its pay-per-view and premium TV products.

Barry Williams, the BISX-listed company's vice-president of finance, said the company had also been "basically spot on" with its top-line forecasts for the 2009 financial year, with revenues "less than 1 per cent ahead of plan" forecasts.

Expressing hope that the Bahamian economy had passed the worst of the recession, with the Government's stimulus package appearing to kick-in towards the year-end, Mr Williams told Tribune Business: "We essentially ended up where we thought we would be on the revenue side, and way better that where we thought we'd be on the expenditure side."

Cable Bahamas' performance for the first two months of 2010 was also holding to expectations, and Mr Williams said: "So far, it's looking pretty much the way we think it's going to be. There's a general consensus that things might be starting to turn around.

"We don't think that the recession is over, or that the hard economic times are finished. We've planned to take that into account with the numbers. For the first two months, we're where we thought we'd be on the revenue side, and a lot of things that we did in 2009, we've carried them forward into 2010. It's not rocket science."

Assessing 2009, Mr Williams told this newspaper: "When looking at the plan compared to results, certain expenditure items were up, certain items were down, but when you look at the aggregate, we ended up much better than plan. We were probably better than plan by about 8 per cent."

The hiring freeze that Cable Bahamas imposed in 2009, only hiring to fill critical positions that had been vacated, coupled with consolidated installations - with cable TV and Internet being activated by the same technician - were key factors in the reduced year-over-year operating expenses. Some content providers had also reduced programming costs upon request.

Company

Mr Williams told Tribune Business that the company had also benefited from the reduction in global oil prices when it came to its electricity and transportation costs, with the anticipated carry-over from the summer 2008 fuel cost peak failing to materialise.

"We did a lot better on electricity and vehicle operations," he explained. "On electricity, we were over 20 per cent better [than budget], and on vehicle costs, which include fuel, we were 6 per cent better than plan."

Cable Bahamas saw its Internet subscriber numbers increase by more than 2,000 in 2009, increasing from just under 43,000 at year-end 2008 to over 45,000 as at December 31, 2009.

Growth

Mr Williams attributed this growth, which bucked the recessionary trend, to the ever-increasing demand for Internet-based services and applications, especially among the '30 and under' demographic age group, with an estimated 45 per cent of Bahamians now using Facebook and other social media/networking sites.

"We're realising more and more every day that the Internet service is one our customers and consumers depend on to do a lot of things, and we have one of the highest country Internet penetrations in the Western Hemisphere," the Cable Bahamas executive said.

Persons were using the likes of Twitter and Facebook as "part of their daily routines, and that's driving a lot of the Internet growth that we're seeing".

Mr Williams said the one area where Cable Bahamas failed to meet its 2009 budgetary projections was "discretionary products", such as its premium pay-per-view and Oceans Digital TV packages, which were off by about 3 per cent.

Yet with basic cable television holding firm, Mr Williams told Tribune Business this indicated that Cable Bahamas' customers were switching out of premium to less expensive products and services, rather than dropping the company's services altogether.

Cable Bahamas was also likely to continue its 'Amnesty', meaning lenient disconnection policies for consumers who fell behind on payments, into 2010, Mr Williams added.

Relief

"That provided a good bit of relief to customers and we plan to do the same kind of thing in 2010, so subscribers stay on via a managed payment plan to make sure they remain connected," he explained.

This initiative, Mr Williams said, benefited consumers who were 60 days or more in arrears. He told Tribune Business that at any time during the year, depending on the season, some 3,000-5,000 customers could be that far behind in payments to Cable Bahamas.