The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company’s (BTC) controlling shareholder yesterday said it was moving rapidly to ensure the carrier’s network “is second to none”, revealing its multi-million dollar investments were already producing returns.

Phil Bentley, Cable & Wireless Communications (CWC) chief executive, said BTC’s recent launch of Long Term Evolution (LTE) technology was intended to boost its competitiveness prior to the long-awaited arrival of cellular competition in the Bahamas.

Speaking to analysts in his first conference call on CWC’s 2013-2014 third quarter results, Mr Bentley said Bahamians were starting to recognise “that service has improved” in the three years since BTC’s privatisation.

That assertion is likely to be subjective, given continuing complaints from many Bahamians about dropped calls and poor quality service, but Mr Bentley said CWC was “excited” about the potential for growth in BTC’s cellular/mobile business.

Responding to a question from JP Morgan analyst, Carl Murdock-Smith, who asked about the status of cellular market liberalisation in the Bahamas, Mr Bentley replied: “You’ve really got to ask the Bahamian government where we are.

“The process starts in April of this year. We are, as you saw, investing in improving our network, improving our coverage.”

He added: “I’ve been down there [to the Bahamas] three times now, and people do recognise that service has improved there.

“We’ve got to make sure our network is second to none, and that’s why we’ve invested in LTE.”

BTC will begin the full roll-out of its LTE technology tomorrow, and its senior vice-president of brand and communications, Marlon Johnson, recently told Tribune Business the carrier will have invested “north of $18 million” in upgrading its cellular network in the 12 months to end-April 2014.

Some $3 million alone has been invested in six new cell towers set to come online in New Providence over the next six weeks.

BTC is planning to switch its high-volume data users over to the LTE technology, which offers users data download speeds at least four times’, and up to 10 times’, faster than the existing network. This is intended to free up capacity on the existing network.

Touting the benefits of CWC’s investment in its Bahamian affiliate, in which it retains just over a 49 per cent equity stake, Mr Bentley said: “We successfully launched LTE services in Cayman and the Bahamas, which are important upgrades in those markets.

“We remain excited by the potential of our mobile business there.”

Mr Johnson previously confirmed to Tribune Business that BTC’s continued network infrastructure investments were being made with one eye on the upcoming April 2014 end to its cellular monopoly, with the carrier potentially facing competition for the first time in its most lucrative market come year-end 2014.

The timing and method of cellular liberalisation will be determined by the Government, with assistance from the Utilities Regulation and Competition Authority (URCA). Among the likely bidders for a second licence are Digicel, Cable Bahamas, Virgin Mobile and Vodafone, the latter of which was part of a group that bid on BTC during the privatisation process.

Echoing the ‘we’re getting BTC ready for competition’ theme, Tim Pennington, CWC’s outgoing chief financial officer, said: “Our approach remains the same.

“We’re building a strong business to take on any competition, so it’s a strong network, strong customer service, a strong proposition. I think you’re seeing that in some of the results we’re producing.”

Elsewhere, Mr Bentley alluded to CWC’s relationship with the Bahamian government, and recent agreement to create the BTC Foundation, as a model he wanted to pursue in Trinidad & Tobago.

CWC has a minority stake in Trinidad’s incumbent carrier, and while partners with a government shareholder there, too, Mr Bentley said it lacked the commercial platform to improve the business.

“As we’ve shown in places like Panama and the Bahamas, we can work very well with government as shareholders and operate commercially,” the CWC chief executive said.

Looking at its wider LIME Caribbean business, Mr Bentley said CWC had cut operating costs across the region by 11 per cent year-over-year. And its region-wide staffing levels had also been slashed by 11 per cent during the third quarter.

While this has yet to impact BTC, which went through a voluntary separation exercise to right-size staffing levels in the immediate aftermath of privatisation, events elsewhere in the Caribbean will doubtless make staff and their trade unions nervous.

Mr Bentley confirmed that CWC was on track to achieve a “run rate operating cost reduction of $50 million” in its Caribbean business for the year to end-April, and see a similar drop in the next financial year for a total $100 million savings.

He added, though, that there had been “a reality check” and that it was necessary “to improve performance and get some growth into” the overall CWC business.

CWC, Mr Bentley said, was working on a three-year plan - to be unveiled this May - that would strive for top-line growth, business efficiencies and returns on investment and improved customer service.

He added that while Caribbean rivals such as Digicel and Flow were ‘double’ and ‘triple play’ providers respectively, with Cable Bahamas falling into the latter, CWC could offer a ‘quadruple’ play proposition that it needed to capitalise on.