My Thoughts on Technology and Jamaica: CWC Report ending March 2014 indicates LIME Jamaica's improving Bottom Line - Project Marlin heralds Solar Powered Telecom Provider to Reduce Operating Costs

Wednesday, June 11, 2014

CWC Report ending March 2014 indicates LIME Jamaica's improving Bottom Line - Project Marlin heralds Solar Powered Telecom Provider to Reduce Operating Costs

“We will continue to improve our operating model, make significant investments in our infrastructure and provide customers with the most affordable services in
order to generate strong returns for our shareholders and fulfilling work environment for our employees”

CWC (Cable and Wireless Communications) in a Statement on their Financial Report for the Year ending Monday March 31st 2014 as presented on Wednesday May 28th 2014 at their Shareholder's Meeting

LIME’s a really complicated Company to follow indeed!

Still, their three (3) year plan of Mobile Dominance that began when the OUR (Office of Utilities Regulation) made their MTR (Mobile Termination Rate) ruling on Sunday July 15th 2012 as detailed in my blog article entitled “LIME drops JA$2.99 Talk EZ to All Networks as Digicel promises something Bigger - Telecom Providers can bring The Heat via lower Priced Smartphones to spur 3G Data and Postpaid Plans” is STILL on course.

This as for the Financial Report for the Year ending Monday March 31st 2014, CWC (Cable and Wireless Communications) is a mixed bag of Caribbean Cashew Nuts in terms of its financials as stated in “Bittersweet returns from LIME Jamaica - Subscriber base expands, but revenue shrinks”, Published Wednesday  May 28, 2014 by Richard Browne, Business Reporter, The Jamaica Gleaner and “LIME Jamaica subscribers hit 700,000”, published Wednesday, May 28, 2014, The Jamaica Observer.

Despite being listed on the Jamaica Stock Exchange, LIME’s website is very sparse and give no information on its day-to-day operations. LIME’s YouTube Page, LIME’s Twitter Account and LIME’s Facebook Account are even worse. Hence the reason I had to dig through their stats as presented at the Wednesday May 28th 2014 Shareholder's Meeting.

Before I begin the analysis, it’s good to note that CWC maintain a positive outlook despite what the figures say, to quote CWC: “Our strategy of remaining focused in being trusted advisors to our corporate, government and enterprise customers along with providing them the most robust data connectivity solutions will continue to help us maintain our market share and margins in this segment”. 

CWC Stats – Mobile, Broadband and on the Rise even as Fixed Line/Landline declines

Straight to the stats folks distilled from these articles for the Financial Report for the Year ending Monday March 31st 2014! So far it’s in keeping with my expectations based on the positive results from the Third Quarter of 2013as reported in my blog article entitledLIME experiences 25% increase in Profits due to MTR - 4G LTE and FTTH like Bahamas with IPTV Streaming LIME TV will give LIME 3 Days to Kill”.

In that Quarter, Telecom Provider LIME saw a 25% increase in Operating Profit even as they roll out 4G LTE Services in Bahamas earlier in February 2014 as reported in my blog article entitledBahamas Telecommunications Company launched 4G LTE on Valentine's Day - Jamaicans need UNCHR Right to Broadband Access needed to empower Jamaicans before 4G LTE can go National”.

CWC is now restructured with a Caribbean and Latin America Focus, their Global Strategy is focused in areas that based on the acronym of their Name LIME:

1.      Mobile 
2.      Fixed Lines/Landline
3.      DTT (Digital Terrestrial Television)
4.      Broadband
5.      Business Services Solutions

These Stats are broken down by CWC operation Regions, which now consists of 16 Caribbean and Central American countries. CWC's apparently put more emphasis on this region, cutting back its global presence in 37 countries across five continents, even recently selling its stake in Monaco Telecom for US$445 million earlier in May 2014.

Overall for CWC as Company overall:

1.      1% decline in CWC's overall revenue to US$1.87 billion
2.      23% increase in Mobile Data Revenue
3.      45% increase in Net Profit to US$148 million
4.      5% or US$43 million decline in Operating costs
5.      5% increase in EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) to US$608 million

For the Caribbean as a Market, Mobile was the only positive:

1.      1% increase in mobile revenue growth
2.      13% decline in Fixed Line/Landline
3.      3% overall decline in Caribbean Revenue to US$1.08 billion

For LIME Jamaica, the percentage stats initially look great but aren't very encouraging when you dig deep into them:

1.      31% growth in Mobile Subscriber Base to 705,000, representing an increase of 165,000 subscribers
2.      17% increase in Broadband revenue
3.      13% increase in Broadband subscription base
4.      17% increase in Broadband Revenues with 0% Churn thanks to LIME Browse and Talk 
5.      6% increase in Data service revenue
6.      28% or US$7 million increase in Mobile Voice revenue

Overall the Revenue numbers look promising for LIME Jamaica:

1.      JA$$3.5 billion Loss compared to JA$$4.8 billion in 2013
2.      JA$18.4 billion total revenue, down from $19 billion in 2013
3.      JA$24 billion in negative equity 
4.      84% increase in operating profit to J$766 million before restructuring costs 
5.      43% increase in EBITDA

LIME’s gradually improving Bottom Line – Focus on Reducing Operating Costs is Working

If you remember before, Telecom Provider LIME had seen a 21% increase in Voice Traffic in 2012 immediately after the first MTR by the OUR on Sunday July 15th 2012 as reported in my blog article entitledLIME reports Voice Traffic up 21% in Second Quarter of 2012AD - ACS-Xerox loses contract to TELUS International as LIME becomes Mavado Money Changer”.

These stats therefore represent the Trickle down effects from then till now of not just one but two MTR, the second taking place on Monday July 1st 2013 as stated in my blog article entitled “OUR sets Cross-Network Rates at JA$1.10 as of Monday July 1 2013 - Everything is Possible  as we’re Zombies for Data World War Z”.

Thus with the increased Traffic and Subscribers they’ve desired, they can now focus on reducing their Operating Expenditure, which they successfully executed as mentioned in the Financial Report for the Year ending Monday March 31st 2014:

1.      8% reduction in Operating Costs in the Caribbean
2.      US$77 million in savings for CWC due to the reduction in Operating Costs in the Caribbean
3.      US$25 million gained from internal restructuring
4.      US$17 million from outsourcing

Right now, Telecom Provider LIME is making plans to roll out 4G LTE using the AWS Spectrum which they purchased for US$30 million as stated in my blog article entitledLIME chooses AWS for 4G LTE – AWS  Link Budget difference reduces Shadowing as It’s all about Optimization and Human Nature”.

LIME Rises to the Occasion – Solar Powered Telecom Provider under Project Marlin

Telecom Provider LIME had achieved these Cost Reductions via outsourcing Maintenance of their Fixed Line/Landline and Mobile Network to Ericsson as reported in my blog article entitled “LIME outsources Network Maintenance to Ericsson - The Lone Rangers in Telecoms may have to Tag Team to get a 700Mhz license for 4G LTE”.

Curiously, Telecom Provider LIME may yet go the Solar Power Route, as plans are afoot to also achieve loftier goals of Power Cost Reduction. Automation of their Call Center Management may also be in the works, especially as AI (Artificially Intelligent) Programs exist that can mimic Human Behaviour and understand Human speech as stated in my blog article entitled “IBM's Watson soon to be a Watson Engagement Advisor in Call Centers - The Internship of Ask Watson 40% faster search puts Customer Service Agents in Jeopardy at The World’s End”.

Their year-long Promotions Browse and Talk are also ongoing for ADSL (Asynchronous Digital Subscriber Line) Broadband Services as stated in my blog article entitledLIME Jamaica introduces 30-day Data Plans for JA$300 and a free Alcatel One Touch T'Pop - How the Butler started the Smartphone Data Revolution”, which is helping to reduce churn in their Landline Customer Subscriber base.

Their business customer have not been forgotten, as Telecom Provider LIME had also rolled out revamped ADSL Services for their Business Customers after Telecom Provider Digicel had launched DigiHome as stated in my blog article entitledLIME rolls out new Business themed ADSL and Local and International Landline Calling Bundles - DigiHome offense could Herald the coming of LIME FTTH and relaunch of LIME TV”.

CWC is basically continuing their forward momentum for the next three years since the MTR was handed down by the OUR on Sunday July 15th 2012 as stated in my blog article entitled “OUR's JA$5.00 Cross Network Flat Rate ratified by Judge Ingrid Mangatal - GOJ's Telecoms Tax applied and Digicel's victory in FTC Case assured”.

With plans under Project Marlin to pump US$250 million of additional investments into Caribbean and Latin American Networks and invest another US$1 billion in Fixed Line/Landline and Mobile Networks over the next three (3) years, Telecom Provider LIME is Rising to the Occasion by staking their fortunes on the Caribbean!

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