Cable and Wireless Report "Poor" Earnings in Caribbean
http://www.caribbeanpressreleases.com/articles/8346/1/Cable-and-Wireless-Report-Poor-Earnings-in-Caribbean/Page1.html
S Coward
By S Coward
Published on 26-May-11
May 26, 2011 - "We are cautious on the economic and financial outlook for the Caribbean (excluding BTC) where it is prudent to assume an EBITDA range of US$180-210 million."
Vew Full Financials
Caribbean
* EBITDA in second half in line with first half
* Limited near-term prospects of material economic recovery
* Implementing our „win-back‟ plan for Jamaica - launching mobile TV in December last year and expanding our 3G coverageWe saw little improvement in the trading environment in the Caribbean over the period and this was reflected in revenue being 3% lower than last year.
Mobile revenue at US$302 million was 6% lower than last year although it was stronger in the second half than the first half. ARPU in the second half of the year improved by 3% as non-voice usage increased. We maintained our market positions and launched mobile TV in Jamaica which has attracted new customers and improved our brand perception. The regulatory environment in Jamaica continues to be a concern and we are taking appropriate steps so that the proposed merger between two mobile competitors in Jamaica will not further undermine the ability of our business to compete effectively. Today we have announced that we will provide the iPhone4 in our Caribbean markets including our joint venture in Trinidad & Tobago.
Broadband & TV revenue was 6% better than last year at US$105 million as ARPU across the region increased by 3%. Broadband subscribers have declined during the year as a result of churn, primarily in Jamaica, reflecting credit issues and an increasingly competitive environment.
Difficult market conditions and structural decline continue to impact fixed voice revenue, which fell by 9% to US$278 million. We saw lower usage from ongoing traffic substitution and subscribers continued to churn, primarily in Jamaica, due to affordability constraints resulting from the economic environment.
Enterprise, data and other revenue of US$165 million was 11% higher than last year. The East-West Cable link between Jamaica, the Dominican Republic and the British Virgin Islands was completed at the end of January and is already having a positive impact on the growth of this business line.
Gross margin fell by 5% to US$614 million, reflecting lower revenue and increased interconnect costs in Jamaica. Operating costs of US$385 million were 2% higher than the same period last year. The business was adversely impacted by increased utility prices and we also stepped up our marketing expenditure to improve the perception of the LIME brand and to support the launch of new services such as mobile TV.
EBITDA of US$229 million was 15% lower than last year and the second half was in-line with the first half of the year.
Our proportionate ownership of Caribbean EBITDA for the year ended 31 March 2011 was 90% which will decrease to around 80% following the consolidation of the Bahamas business.
Bahamas acquisition
On 6 April 2011 we completed our purchase of a 51% stake in BTC for cash consideration of US$210 million. The company is the exclusive mobile operator in The Bahamas, as well as a leading provider of fixed line and broadband services. Under the terms of the acquisition, the liberalisation process for the mobile sector will commence no sooner than three years after privatisation.
For the statutory year ended 31 December 2010, the business had total unaudited revenue of US$343 million and EBITDA of US$79 million. At December 2010, the company had approximately 388,000 mobile customers, 123,000 fixed line customers and 19,000 broadband customers. The company is a full service provider and Bahamians will benefit from improved services as we leverage our scale and the regional Caribbean platform. In the short term a number of costs will be incurred as we restructure the business to improve service, network performance and efficiency.
Caribbean
* EBITDA in second half in line with first half
* Limited near-term prospects of material economic recovery
* Implementing our „win-back‟ plan for Jamaica - launching mobile TV in December last year and expanding our 3G coverageWe saw little improvement in the trading environment in the Caribbean over the period and this was reflected in revenue being 3% lower than last year.
Mobile revenue at US$302 million was 6% lower than last year although it was stronger in the second half than the first half. ARPU in the second half of the year improved by 3% as non-voice usage increased. We maintained our market positions and launched mobile TV in Jamaica which has attracted new customers and improved our brand perception. The regulatory environment in Jamaica continues to be a concern and we are taking appropriate steps so that the proposed merger between two mobile competitors in Jamaica will not further undermine the ability of our business to compete effectively. Today we have announced that we will provide the iPhone4 in our Caribbean markets including our joint venture in Trinidad & Tobago.
Broadband & TV revenue was 6% better than last year at US$105 million as ARPU across the region increased by 3%. Broadband subscribers have declined during the year as a result of churn, primarily in Jamaica, reflecting credit issues and an increasingly competitive environment.
Difficult market conditions and structural decline continue to impact fixed voice revenue, which fell by 9% to US$278 million. We saw lower usage from ongoing traffic substitution and subscribers continued to churn, primarily in Jamaica, due to affordability constraints resulting from the economic environment.
Enterprise, data and other revenue of US$165 million was 11% higher than last year. The East-West Cable link between Jamaica, the Dominican Republic and the British Virgin Islands was completed at the end of January and is already having a positive impact on the growth of this business line.
Gross margin fell by 5% to US$614 million, reflecting lower revenue and increased interconnect costs in Jamaica. Operating costs of US$385 million were 2% higher than the same period last year. The business was adversely impacted by increased utility prices and we also stepped up our marketing expenditure to improve the perception of the LIME brand and to support the launch of new services such as mobile TV.
EBITDA of US$229 million was 15% lower than last year and the second half was in-line with the first half of the year.
Our proportionate ownership of Caribbean EBITDA for the year ended 31 March 2011 was 90% which will decrease to around 80% following the consolidation of the Bahamas business.
Bahamas acquisition
On 6 April 2011 we completed our purchase of a 51% stake in BTC for cash consideration of US$210 million. The company is the exclusive mobile operator in The Bahamas, as well as a leading provider of fixed line and broadband services. Under the terms of the acquisition, the liberalisation process for the mobile sector will commence no sooner than three years after privatisation.
For the statutory year ended 31 December 2010, the business had total unaudited revenue of US$343 million and EBITDA of US$79 million. At December 2010, the company had approximately 388,000 mobile customers, 123,000 fixed line customers and 19,000 broadband customers. The company is a full service provider and Bahamians will benefit from improved services as we leverage our scale and the regional Caribbean platform. In the short term a number of costs will be incurred as we restructure the business to improve service, network performance and efficiency.