BTC reports flat revenues despite ARPU growth

24 May 2013

Fixed line incumbent and wireless monopoly provider Bahamas Telecommunications Company (BTC) will ‘not be immune’ to parent company Cable & Wireless Communications’ (CWC’s) drive to reduce operating costs by USD100 million, local news portal Tribune 242 writes, citing CWC officials. The officials added that despite a 5% year-on-year reduction in operating costs in the Caribbean, which it attributed mainly to improvements in the Bahamas, BTC’s operating costs were still ‘higher than we’d like to see.’ CWC reported that revenues from the Bahamas were flat and that its mobile subscriber base was unchanged year-on-year, although ARPU had increased. Chief financial officer Tim Pennington attributed the flat revenues to price reductions introduced by BTC following CWC’s acquisition of a 51% stake in the previously wholly state-owned telco in April 2011.

Looking ahead to the planned introduction of competition in the wireless space, Pennington went on: ‘One of our critical objectives in the Bahamas is to get ourselves into a competitive position for the future. Not only have we been streamlining our cost base, but we’ve also been reducing our pricing there. We’ve made significant price reductions, which is why our revenues are flat. Customers are using more, using more of the services, using more of the data, but we’ve been driving prices down to make sure that when competition comes in we’re not at a disadvantage to international or regional prices.’

Whilst BTC’s main cost saving in 2012-2013 came from a voluntary redundancy programme that reduced staff headcount by several hundred, CWC clarified that further reductions were on the horizon: of the planned USD100 million reduction in costs, CWC said that around USD60 million to USD70 million would come from staffing cuts.

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