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Cable & Wireless Reports Preliminary Q1 2016/17 Results

Network Investments Drive Broadband Subscribers up 49,000 (8%) YoY; Successful Launch of our Exclusive Flow Sports Premier Channel; Mobile Subscriber Base Grew by 148,000 YOY; Delivering Against Columbus Synergy Plan

Cable & Wireless Communications Limited ("CWC") is a leading telecommunications operator in substantially all of its consumer markets, which are predominantly located in the Caribbean and Latin America, providing entertainment, information and communication services to 3.7 million mobile, 0.4 million television, 0.6 million internet and 0.8 million telephony subscribers. In addition, CWC delivers B2B services across the region and provides wholesale services over its sub-sea and terrestrial networks that connect over 30 markets.

Operating and financial highlights*:

  • Delivered 14,000 subscriber additions in Q1 2016/17, as compared to 4,000 adds in prior-year period
    • 2,000 video additions driven by our DTH business in Panama
    • 5,000 broadband internet and 6,000 telephony subscriber adds, supported by network investment
  • Mobile data penetration up seven percentage points YoY to 53%
  • Further strengthened our customer proposition through launch of Flow Sports Premier in July
    • Providing HD sporting content exclusively to Flow customers with unrivaled Premier League coverage; only Flow customers can watch all 380 games a season, beginning in August
  • Investing to drive future performance, including:
    • Completed roll-out of unified Flow brand across region
    • Activated LTE-Advanced network in Cayman providing peak throughput > 75Mbps
    • Launched fixed bundles in Trinidad & Tobago
    • Strengthened B2B portfolio with launch of cloud-based call center solution
    • Deploying new advanced video platforms in Panama and the Bahamas

Subscriber Statistics

CWC delivered a solid Q1 2016/17 performance as the organic changes for all of our fixed and mobile product categories improved year-over-year. In our mobile business, which represents roughly 40% of our total revenue, the total base increased by 148,000 subscribers or 4% year-over-year to 3.7 million. This performance was led by a 21% increase in subscribers who purchased a data plan. Mobile data penetration now stands at 53% of our total mobile subscriber base, up 2 percentage points from 51% at March 31, 2016.

Turning to our fixed-line business, we added 14,000 subscribers during the quarter, with year-over-year improvements across all three products. We reported 5,000 broadband net additions in Q1 2016/17, as we increased penetration over our improved networks. On the video front, we added 2,000 subscribers in the quarter, driven by growth in Panama DTH, where we have seen strong demand for our prepaid TV product and our DTH subscriber base rose from 16,000 to 39,000 year-over-year.

Offsetting this increase, video subscribers in the Caribbean declined as a result of increased competition and challenging economic environments, however we are working to mitigate these factors by re-vamping our product offering in these markets, including the July launch of our Flow Sports Premier channel. This premium channel will feature HD content and offer the very best in sporting content, exclusively to Flow's customers across the region. The highlight of Flow Sports Premier will be unrivaled coverage of the Premier League beginning in August 2016 – the world’s most popular football league – ensuring that only Flow’s customers can watch all 380 games a season.

Rounding out our fixed-line products, we added 6,000 telephony subscribers in the quarter, as we increased penetration of our VoIP-based services through bundling across our footprint. Triple-play penetration increased 170 basis points over the year to cover 8.6% of our subscribers at June 30, 2016, still leaving ample room for growth. Finally, during the last twelve months, we have expanded our network by roughly 35,000 homes and upgraded over 100,000 homes to two-way capability.

From a regional standpoint, the following highlights the trends in our largest markets:

  • Panama mobile subscribers declined 1% in the quarter as continued competition through aggressive promotional activity adversely impacted our prepaid customer base. However, this was partly offset by higher-ARPU postpaid subscribers, which were up 2%, representing the eighth consecutive quarter of growth. Our prepaid DTH product, up 22% in the quarter, continued to drive video subscriber growth in Panama. Fixed video and broadband subscribers grew by 3%, and should be further supported by the upcoming launch of re-vamped video and broadband products in the Panama market.
  • In the Bahamas, we experienced relatively flat broadband and fixed voice performance but plan to launch a video product in Q2 2016/17 that we expect will strengthen our competitive position.
  • Turning to Jamaica, one of the largest telecommunications markets in the region, broadband subscribers were up 2%, and mobile subscriber numbers continued to grow, with 18,000 additions in the quarter, as we continued to win back market share following the successful rebranding to Flow.
  • Increased competition and challenging macroeconomic environments in Barbados and Trinidad & Tobago led to reduced video subscribers, however we are seeing encouraging early results from recently launched fixed bundles in Trinidad & Tobago.

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