The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

ALIV's top executive yesterday said he was "confident" obstacles to sharing infrastructure with its main rival had been overcome, with the mobile upstart poised to "conquer" its targets.

Damian Blackburn told Tribune Business that many co-location and facilities sharing issues between Aliv and the Bahamas Telecommunications Company (BTC) were "behind us", even though the investor documents for its new $15 million preference share issue blame the latter for "delays" in its southern Bahamas roll-out. "Despite installing network equipment in Exuma, Long Island and Cat Island, the company's full launch these islands and the rest of the Bahamas has not been completed due to delays in the provision of certain dependencies of BTC," the documents, for an offering that launches on Monday, state.

"These include Aliv's use of BTC's subsea transmission services and certain cell towers which are governed by operating agreements. In spite of these delays, which are being addressed by URCA [the industry regulator], Aliv has completed the non-dependent areas and is ready to launch into the remaining islands once the issues with BTC are resolved."

Mr Blackburn told Tribune Business that Aliv "will go live next week" in Exuma, and was just completing its network testing now. Suggesting that relations with the mobile operator's incumbent rival have improved, he added: "BTC have been doing a good job now in delivering co-location, and transmission is in its final throes of being delivered.

"We've got Exuma up and running, and are using their [BTC's] sub-sea fibre. I'm confident a lot of these issues are behind us. We're all playing nicely."

The Aliv chief described the $15 million offering as "the last bit of financing we need" to complete its nationwide infrastructure roll-out, and described its securing of 100,000 subscribers or 30 per cent of the Bahamian mobile market within 14-15 months of the November 2016 launch as "quite an achievement".

"We've built out the network live at 160 sites, and actually have equipment installed at another 41," he told Tribune Business. "The final target is build-out at 230 sites. We're well advanced. It's just progressing things to acquire customers to our target 40-50 per cent [market share].

"From where we're at we're delighted with the brand building and position, and are in good shape to conquer it."

Aliv's offering documents concede that it is eight months' behind target on achieving its revenue margins, or average revenue per subscriber (ARPU), which it blamed on the later-than-expected launch of number portability impacting its ability to acquire key consumer segments (see other article on Page 1B).

Mr Blackburn, though, took a sanguine view of this, saying: "Delays are delays. There are always challenges, but we've got through them and are set fair.

"You take the market in front of you. We've been taking the customers available to us, and things have been opening up in the last couple of months. Twenty-five per cent of the base have ported their number. It's settled down a lot recently. Everything is getting more orderly."

Aliv's financial projections show the mobile operator moving 'into the black' on operating income in its next financial year, which closes on June 30, 2019. Earnings before interest, taxation, depreciation and amortisation (EBITDA) are forecast to go from a $28 million loss this year to a positive $5 million next, and thereby improve to $24 million in 2020 and $37 million in 2022.

The mobile operator is targeting 50 per cent market share "within three years", with new commercial packages set to launch on February 22 and increased customer acquisition through number portability.

Revenues are projected to nearly triple over the next five years, jumping from $43 million for the year to end-June 2018 to $115 million in 2022. With the cost of sales held steady at $26-$27 million, gross margins are forecast to rise from $19 million to $88 million.

For the 16 months to end-June 2017, Aliv's audited financial statements show it produced revenue of $12.9 million with negative EBITDA of $44.8 million, compared to initial projections of $23.9 million and negative $30.3 million, respectively.

The operating and net losses for that period were $54.289 million and $55.538 million, respectively, as Aliv goes through its 'start up' and growth phases by incurring 'red ink' while it finances network build-out and customer acquisition. Aliv's balance sheet at end-June 2017 showed it had net equity worth more than $81 million.

For the quarter that ended on September 30, 2017, total revenues of $6.7 million and negative EBITDA of $9.2 million was achieved on an 88,000-strong subscriber base.