Business is not exactly flowing in the right direction for one local telecommunications company these days.
In its just released preliminary financial results for the first quarter of this year, Liberty Global, the parent company for Flow (Barbados) Limited, reported that its overall list of subscribers –– which impact on its ability to make money –– is down for the January to March review period.
In fact, the telecoms company suffered a loss of 2,000 subscribers, which Liberty Global said was mainly due to a fall off in landline business.
Nonetheless, Flow was able to stabilize its video and Internet platforms, which reported “a significant improvement compared to combined losses of 5,000 [subscribers] in the last quarter of 2016 across video and Internet”, according to the January to March financial results.
Just this week, Flow (Barbados), which is currently undergoing internal restructuring as part of a broader business transformation programme, announced that several employees would be going home, following the sudden departure of Managing Director Niall Sheehy back in March.
At that time, the new man in charge of Flow’s Caribbean operations Garfield Sinclair had complained that outdated laws governing landline business were putting the company at a competitive disadvantage. He also said while Flow was in Barbados for the long haul, it was important that changes be made to the regulations to better reflect the current market conditions.
Sinclair could not say what percentage of the market, or of the company’s business was generated through landlines, but said at the time that like the rest of the world the landline business here had been declining.
The first quarter financial results supported his position.
They also showed that CWC’s revenues had taken a hit with the company recording a four per cent decline in earnings for the period under review, compared to the same period last year. However, no breakdown was given for its individual markets.
Overall, however, CWC added 10,000 subscribers for the quarter, compared to a loss of 20,000 in the last quarter of last year. This compared to an increase of 286,000 subscribers for Liberty Global in Europe and Latin America, up 46 per cent over last year.
The parent company’s revenue also grew by two per cent in the European market.
Mobile subscribers were up in the Caribbean and Latin America, driven by prepaid gains in Panama of about 49,000, and continued postpaid success in Chile of about 13,000 for the period under review. However, this was offset by losses in other CWC markets, including a decline of 10,000 subscribers in Jamaica and 6,000 in The Bahamas.
In Jamaica where the number of mobile subscribers remained above the 900,000 mark, the company blamed the decline on its reduced promotional activity during the first quarter compared to the last quarter of 2016.
This impacted on the group’s revenues, which declined by $31 million.
CWC’s operating cash flow was further challenged by an $8 million vendor credit; higher programming costs primarily related to the Premier League; increased costs associated with Hurricane Matthew and bad debts, as well as increases in “certain other costs”, including network and marketing expenses, ahead of Liberty Global’s £3.5 billion (BDS$8.7 billion) takeover of CWC last May.
“These factors were practically offset by reduced bonus costs in quarter one of 2017,” Liberty Global said, adding that the inclusion of CWC accounted for the “majority” of the changes experienced in its operating, investing and financing activities.