By NEIL HARTNELL
Tribune Business Editor
THE Bahamas Telecommunications Company (BTC) has lost over 60,000 mobile customers, almost 20 per cent of its market, in just over one year as a result of competition.
Data released by BTC's ultimate parent, Liberty Latin America (LiLAC), reveals that at end-2017 its Bahamian subsidiary had 228,100 pre-paid subscribers and 26,800 post-paid customers, giving it a total base of 254,900 persons.This compared to the 282,000 pre-paid and 33,000 post-paid subscribers that Liberty's 2016 accounts showed it as possessing one year earlier, which was just after BTC's first-ever mobile rival launched in November 2016.
The data gives some idea of the inroads made by Aliv into BTC's long-standing mobile monopoly in the 13 months since it began operations, at least from a market share perspective.
The upstart entrant, in the private placement offering document for its recent $15 million preference share issue, pegged its subscriber numbers and market share as significantly higher than the numbers provided by LiLAC.
"As at December 2017, Aliv had achieved a customer base of over 97,000 on a 30-day basis or 106,000 on a 60-day basis. Our market share is estimated at 29 per cent," Aliv said. It added that the '60-day' reporting schedule was equivalent to the methods used by BTC to measure subscriber retention.
The discrepancy between Aliv's and BTC/LiLAC's figures likely result from differences in how they measure and account for such customer 'churn', and the timing of recording subscriber losses/gains.
Still, both sides' data provides evidence of the significant inroads that Aliv has made into BTC's customer base, a development that has increasing significance for the latter and its financial performance.
Prior to mobile market liberalisation, and Aliv's entry, BTC was becoming ever-more reliant on its long-standing mobile monopoly, which had grown from two-thirds of annual revenues to approaching three-quarters or 75 per cent. Thus Aliv's seizure of growing market share is squeezing, and shrinking, BTC's most valuable revenue source.
The year-end accounts for BTC's immediate parent, Cable & Wireless Communications (CWC), which is now a LiLAC subsidiary, confirmed that the Bahamas accounted for almost 25 per cent of its network-wide 42,000 mobile subscriber decline in the 2017 fourth quarter.
"Continued growth in Jamaica (23,000 additions) was more than offset by declines in Panama (61,000 decline) and the Bahamas (11,000 decline)," CWC said. "The Panama decline reflects our ongoing focus on higher ARPU (revenue per subscriber) customers and competitive intensity in the market, while increased competition continued to impact the Bahamas."
LiLAC, in its February 15, 2018, full-year results presentation to market analysts, noted the same competitive pressures being imposed by Aliv. It added that the Bahamas accounts for 7 per cent of its $3.6 billion annual revenue, placing BTC's top-line at around $252 million.
LILAC's filings with the US Securities & Exchange Commission (SEC) also showed declines or minimal growth in BTC's other key business lines. While video (TV) subscribers almost quadrupled from 1,600 to 6,200 year-over-year, it has a long way to go to match Cable Bahamas, Aliv's controlling shareholder, on its home turf.
BTC's Internet subscriber numbers rose by just 200 year-over-year, from 26,400 to 26,600, again indicating the struggle it is having to build market share in another segment dominated by Cable Bahamas.
And its fixed-line telephone subscriber numbers dropped from 55,100 in 2016 to 47,400 this time around. Homes passed by BTC's infrastructure also 'fell' from 155,000 to 128,900, while 'customer relationships' and 'revenue generating units' dropped from 55,200 and 162,500, respectively, to 47,400 and 80,200 - the latter a decline of over 50 per cent, which was not explained by the filings.
Aliv's preference share offering documents, meanwhile, reveal that it "is still targeting at least 47 per cent of [mobile] market share over the next two years that will be driven by increased demand for data, better network and, of course, excellent service".
Its internal financial projections forecast that subscriber numbers will increase from 108,000 at end-March 2018 to 144,000 by June 30, 2019, the month when its financial year ends. This represents an increase of 33.3 per cent.
"As at December 31, 2017, we estimate that the company has achieved just under 30 per cent of what we have determined to be the total cellular market in the Bahamas," Aliv's offering document added.
"We have achieved industry record adoption of our services and porting results.... We continue to see improvement in our average revenue per user (ARPU) results as customers take advantage of the ability to switch to our network while keeping their existing phone numbers.
"Since Mobile Number Portability (MNP) was implemented on April 28, 2017, we have seen porting customers grow exponentially month-over-month with currently 25,000 active ports inclusive of both prepaid and post pay."