To many, telecom operator, Cable & Wireless always seems to making huge losses, the year to March 2015 is no exception, but encouragingly, this year its operating profit more than doubled to $1.6 billion from $766 million, its highest in years, which reflects increased market share and greater customer spend. The telecom company announced a $9.17 billion annual loss from $21.6 billion in revenues to March 2015 compared to $3.5 billion loss in the prior year, from $3 billion less revenues of $18.44 billion. The huge loss is mostly attributed to exceptional charge of $6.9 billion, for staff and equipment redundancies, broken down into $4.3 billion for equipment write off and $1.24 billion for staff redundancies. The charge arises from the acquisition of Flow and most likely a merger of both local operations, additionally, C&W booked a charge relating to a court settlement between themselves and Digicel amounting $1.4 billion. Finance cost rose by $1 billion due to increased debt with the parent company as well as increase in the interest rate based on higher Treasury bill rates locally, but rates are on the decline which will help keep cost in this area down.
During the financial year Cable & Wireless added more than 107,000 mobile subscribers bringing the total to 820,500, according to the annual report of CW Communications (CWC) the parent company of Cable & Wireless. The cellular customer base has just about doubled since March 2012. At the end of December last year, C&W stated then that the cell customer base grew 18 percent, year to date to 813,000. C&W is said to have grown the cell customers by approximately 80,000 for the year to March 2013 and for the 12 months to March 2014 by 165,000.
Growth in cell customers increased mobile market share to 28 percent, based on customer who used their handset within the last three months according to the parent company, and probably more, based on all their customers with credit balances on handsets. The subscriber base of its main rival Digicel Jamaica, is said to hover around two million, but in all possibility, the number is under 2 million with the growth in C&W numbers over the last four years.
The increased subscriber base rocketed the mobile segment to incontrovertibly become the leading segment for the company. Mobile revenues earned $8.7 billion up 30 percent year on year; fixed voice remained flat at $6.5 billion, managed services at $3.6 billion was 25 percent higher than in 2014 and broadband & video at $2.7 billion compares to $2.3 billion or 17 percent increase year on year.
Some $4.5 billion of the exceptional charge relates directly to the flow acquisition. How much income will flow into C&W Jamaica from that operation is unknown at this time, but it should mean at least reduced cost for C&W from its existing operation. Revenues should continue to grow with the mobile customers added last year, generating income for the full year rather than part thereof, as occurred in the years of acquisition. The company should continue to add more customers in the current year as it goes after increased market share, particularly in the cellular market. The numbers suggest that the company could well return to profitability this year, based on the above savings and potential growth in revenues.