C&W Communications praises LIME for mobile fightback
Published:Friday | December 7, 2012 | 12:00 AM
London-based Cable & Wireless Communi-cations (C&W Communications) lauded its Jamaica subsidiary LIME for its mobile 'fight-back' campaign which bolstered mobile subscriber growth by 20 per cent in the latest quarter.
It's a rare commendation by the parent company, which scolded the Jamaica operations in previous reports.
"We saw improving results in Jamaica where our 'fight-back' campaign is gathering momentum following regulatory changes made by the Government," said C&W Communications in its financials released recently on its site.
Jamaica's performance led the group in terms of the second-quarter highlights.
"In Jamaica, we received an excellent customer response to the launch of our new reduced-rate mobile packages ahead of long-awaited changes to the regulatory environment in July," the report said. "To date, we have increased our Jamaican subscriber base by 20 per cent compared to the first half of last year and mobile service revenue also rose as call volumes and data usage have grown," it added.
In June, LIME dropped its rates amidst an initiative by the Office of Utilities Regulation to set interim wholesale and retail telecommunications rates at $5 from $9, enabled by an earlier amendment to the Telecommuni-cations Act. The slash in rates represented the most aggressive move by LIME to win back market share from Digicel Jamaica, the nation's largest mobile phone network.
Despite the rise in subscribers LIME still posted a loss, which it blamed on a new Government tax. However, it returned to a cash positive position with more than J$225.4 million in cash and equivalents in the quarter, compared with a J$74.8 million deficit a year earlier.
The improvement meant the company had sufficient cash for operations and financing activities. However, it still carried nearly J$16 billion in negative equity on its balance sheet. Just a year earlier, it held equity of J$3.2 billion which was eroded by the write down of assets.
Earlier this calendar year, C&W Communications described the local operation's performance as "poor". It was based on the multibillion-dollar write-down of LIME Jamaica's mobile network booked in financial year ending March 2012.
The impairment cut C&W Communications' net profits from US$344 million to US$24 million for the year ending March 31, 2012, a 92 per cent decline over year-earlier levels, according to the company's financials.
LIME Jamaica lost J$20 billion at yearend March 2012, the majority of which related to the near J$16-billion write-down of fixed assets. It was the fifth straight year of losses for the company, which spent billions to upgrade its mobile and broadband infrastructure to compete against rivals Digicel and Flow Jamaica.