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Btc’S 9% Mobile Fall Undermines Its Owner

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

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.

Comments

observer2 4 years, 8 months ago

I accidentally left my roaming on while traveling abroad and came back to a massive BTC cell bill. Instead of complaining to BTC I called Sprint in the US and they said they had free roaming and internet in the Bahamas and all you needed to pay for to call to and from the Bahamas was 20 cents per minute.

They said a lot of Bahamians in Freeport were doing this to cut out the cost of using their Bahamian phone while in the US.

So I cancelled my Bahamian cell phone and got a US Sprint phone. My friends in the Bahamas now call me on WhatsApp for free, I can send text all over the world for free and I get free internet when I'm traveling along with a hot spot for my laptop. Brilliant!

Also, I can get discounts and shared data from Sprint's Friends and Family plans.

Best of all I don't have a bill from BTC!

Lol...by the time Cable lays out its hundred million dollar cell network a lot of Bahamians will have gotten phones in the United States.

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by observer2

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Emac 4 years, 8 months ago

Brilliant! This is definitely the way to go.

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observer2 4 years, 8 months ago

Other ways consumers can save cost is to cancel Cable TV which just went up in price and don't buy BTC's IPTV. Cable TV is low definition crap and you can get HD TV using an Apple TV, Google TV or Amazon TV box which connects to your internet. You can then get Netflix for movies.

Also you don't need a fixed line to your house if you have a cell phone. Save that money too!

With VAT making the cost of living higher consumers need to cut cost somewhere. Why not start with communication costs.

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SP 4 years, 8 months ago

No consideration of how high unemployment factors into a 9 per cent fall in the Bahamas?

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John 4 years, 8 months ago

The biggest news coming out this story is "BTC will not be charging their customers for "Wats App" as long as they have a data package. Does this mean that when Cable Bahamas comes on stream with wireless their customers will have to pay or will Cb have to sign an agreement with BTC. Of course the increase in unemployment contributed to the drop in BTC's revenue as well as the mass deportation of illegals, Haitians especially. Many f them made frequent calls back to Haiti and so that revenue no longer exist. Many local Bahamians have also stopped making cell phone calls. Instead they use Wats App to communicate. There has also been a drop in the number of hours an average person spends on the internet. But then one would wonder if C&W is painting a gloomy picture because competition is coming.

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sheeprunner12 4 years, 8 months ago

Welcome to the global business BTC and CB ...................... no more monopolies .......... time to get rid of your privileged status, unproductive staff and political cronies ........... thanks HAI

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observer2 4 years, 8 months ago

Sheeprunner, the US regulators have stopped US Cell Phone companies from charging their customers for roaming which is a ripoff. That is because many times when you are traveling your phone is downloading a lot of stuff you would not down load if you knew you are paying for it.

BTC still charges for roaming which is a ripoff.

Also, have you noticed how quickly your cell phone minutes expire? Our regulators need to look into this rip off of the Bahamian public.

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John 4 years, 8 months ago

ALL companies will have to stop roaming charges by 2017. Some have decided to increase the per minute charge on calls to make up for loss revenue.

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banker 4 years, 8 months ago

Interesting tidbit in the international telecommunications arena, that CWC would be glad to divest BTC and take a bit of haircut doing it, just to get out of the Bahamas. Not pleased with the government interference in their affairs. If CWC sells, the interesting news is how the bogus 51% will be handled.

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Emac 4 years, 8 months ago

"Meanwhile, BTC yesterday issued a statement clarifying that it will not be charging customers to use What’sApp." Duh! Of course you cannot charge people to use WhatsApp, it is an app that has nothing to do with BTC. Open that stupid can of worms then they will need to charge for Magic Jack App, Viber, FB or Messenger, Google Hangouts, Skype, Nimbuz and many more: All of which can be used to make free calls. Some can even call land line. So BTC even try to say charge users for WhatsApp, or do business similar to the archaic style of business they are used to, then they would be putting the final nail in their own coffin. Cause in truth, why would the average Bahamian customer have data on their phones if not for free calling and messaging? Well some gat it for spinnin' an ting 'n' ting like dat.

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observer2 4 years, 8 months ago

Excellent point Emac. If URCA was up to date with how quickly technology is advancing and wanted to truly provide choice to the Bahamian public they would allow the global internet phone service companies you mentioned (Magic Jack App, Viber, FB or Messenger, Google Hangouts, Skype, Nimbuz) to issue 242 area code numbers.

URCA's policy of not truly deregulating wireless communications hits the poor hardest through the selling of outrageously priced minutes and the quick expiry of those minutes as they don't have internet service in their homes nor a post paid cell phone.

URCA's policy is also leading to the mis-allocation of capital as Cable Bahamas and the government take on hundreds of millions in debt to fund a second cell license. Take a look at the balance sheets of US cell phone companies (e.g. Sprint, T Mobile etc.) and you will see over leveraged (debt laden) utility companies with low income levels. Cable Bahamas is starting to look like them already. Shareholders take note.

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