By NEIL HARTNELL
Tribune Business Editor
The 9 per cent contraction in the Bahamas Telecommunications Company’s (BTC) mobile revenues for the three months to end-December 2015 helped undermine its owner’s top-line growth, it was revealed yesterday.
Phil Bentley, chief executive of Cable & Wireless Communications (CWC), BTC’s controlling shareholder, disclosed that revenues for its fiscal third quarter would have been up 7 per cent year-over-year had it not been for BTC and an 8 per cent fall in group-wide fixed line income.
Mr Bentley added that “excluding the BTC impact”, CWC’s total mobile revenue would have increased by 3 per cent year-over-year, instead of the actual 1 per cent. The mobile top-line for the rest of the Caribbean rose 7 per cent year-over-year.
The CWC chief executive attributed BTC’s reduced mobile revenues to the new roaming agreements it has been required to sign with international carriers, so that the latter’s clients can use their phones while in the Bahamas and vice versa.
“Of course, we have to live with where we are in the Bahamas,” Mr Bentley said, “where we signed new carrier roaming agreements which reduced the rates we charge their international roamers, but this doesn’t have any impact on our own domestic customers.
“If we strip out both those two non-strategic functions [the 8 per cent fixed-line decline and BTC’s new roaming deals] our underlying core performance was equivalent to 7 per cent growth against the prior year quarter.”
CWC yesterday confirmed that a major cut in BTC’s mobile roaming revenues had long been expected, with both Mr Bentley and the latter’s chief executive, Leon Williams, flagging the issue last year.
Mr Bentley said last summer that BTC’s roaming rates were 12 times’ higher than the Caribbean average, while Mr Williams told a Bahamas Society of Engineers (BSE) luncheon that the carrier was facing a potential $30 million roaming revenue loss.
He said then that international were forcing BTC to switch to billing cellular customers on a per second basis, as opposed to per minute charges. Both AT&T and Rogers had threatened to block their customers from roaming in the Bahamas unless the switch was made.
Roaming allows BTC customers to use their mobile phones abroad, while also permitting foreigners - tourists and those here on business - to do likewise in the Bahamas.
For roaming to occur, BTC must have agreements in place with foreign mobile carriers whereby each allows the other’s customers to use their respective networks when abroad. It has become an increasingly essential service for mobile carriers to offer,
Mr Bentley yesterday said CWC’s mobile revenues, which rose by 1 per cent for the three months to end-December 2015, would have increased by 3 per cent “excluding the Bahamas impact”.
Mobile accounts for 40 per cent of CWC’s total group revenues, and the company said in a statement issued yesterday: “Mobile was up 1 per cent in the third quarter, as strong growth in the Caribbean, up 7 per cent, was offset by a 9 per cent decline in BTC, consistent with our expectations.
“BTC mobile data revenue grew strongly, up 24 per cent, as we improved networks through investments in LTE technology. However, voice revenue continued to be impacted by substitution to over-the-top (OTT) providers and previously agreed reduced roaming rates.”
Mr Bentley said yesterday that mobile data was likely to overtake mobile voice revenues as the main source of income from that sector by next year.
Pointing to the collective 7 per cent mobile revenue growth in the Caribbean, he added: “This was offset by the 9 per cent fall in the Bahamas, as we saw the impact of the roaming rate reduction as well as the impact over-the-top, which we are all suffering from.”
BTC’s Internet broadband subscribers grew by 1,000 to 29,000 during the three months to end-December 2015, with the latter figure also representing a 4,000 or 16 per cent improvement year-over-year.
However, CWC admitted that BTC had been forced to sacrifice margins, or revenue per subscriber, to achieve the growth in customer numbers.
“In BTC, growth in broadband subscribers was offset by lower ARPU (average revenue per unit) due to promotional strategies aimed at increasing market share, which we also anticipate will increase following the upcoming launch of video (TV) services in the Bahamas,” CWC added.
Internet Broadband’s ARPU, or revenue per subscriber, dropped to $41.9 at year-end 2015, representing a steady decline from the $51.1 margin it was earning at year-end 2014, and $44.2 at end-September 2015.
Reduced margins was the story across key BTC’s business segments, as the carrier responds to increased competition with margin and price cuts. Mobile revenue per subscriber stood at $55.3 at end-December, compared to $56 at end-September 2015 and $60.4 for the year before.
Fixed-line revenues per subscriber, though, actually increased from $38.1 the year before, and $39.3 at end-September 2015, to $43.3 by year-end.
Fixed-line subscribers, though, were down 6 per cent year-over-year, having fallen from 100,000 to 94,000, with 1,000 of that drop having occurred in the last quarter.
BTC’s mobile subscriber numbers have fluctuated, going from 314,000 at year-end 2014 to 310,000 in September 2015, and back up to 313,000 at December 31, 2015.
Mr Bentley said BTC would launch its Flow IPTV product in the Bahamas by end-March 2016, when CWC’s financial year ends.
And part of CWC’s $135 million capital expenditure during the third quarter went on the deployment of BTC’s new fibre-to-the-home network.
Meanwhile, BTC yesterday issued a statement clarifying that it will not be charging customers to use What’sApp. But subscribers will still require an active mobile data plan to provide the necessary connectivity.