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Bahamas Telecoms loses 80% of its fixed-line income in four years

Trading conditions relating to fixed-line services provided by Bahamas Telecommunications Company make for very depressing reading: a drop of 80% over the four years to the end of 2008. Only increased rental charges have have reduced the losses sustained...

Competition is being blamed by the Bahamas Telecommunications Company (BTC) for the major losses the company has experienced in fixed-line for the year 2004-2008. Losses of US$45 million - a drop of 80% - have been registered. This figure in turn has only averted becoming worse because rental charges have been increased. 

Consultation exercise reports to the public have exposed BTC’s ongoing problems: revenues down 64.5% in 2004-5 when BTC experienced competition because it was ruled by the Utilities Regulatory and Competition Authority (URCA), to have Significant Market Power (SMP), and then down by anything from 16% to 21% in the subsequent three years. In other words, decline was persistent and seemingly unstoppable. 

The good news for BTC is that is no longer reliant on fixed-line: mobile provided over two thirds of revenue in 2007. Even conventional mobile technology is not guaranteed to produce the perfect solution, Skype being one of the “threatening” technologies.

Pricing for customers, consumer and business, also needs to be sorted out. BTC claims that it had its revenues from line rentals pegged to US$45 million, leading to a state of affairs where the price of access lines has gone up from US$9.50 to US$15 for residential customers and from US$21.25 to US$36 for business users, both rises being substantial but not enough to cover the debts incurred by BTC in bringing access to its customer base.

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