Cable 'accelerates' fibre due to Elon Musk threat

• Billionaire's Starlink satellite Internet new 'headwind'

• BISX-listed firm's new network passes 30,000 homes

• Chief executive 'not sure business case' for 5G yet

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas is "accelerating" the roll-out of its fibre-to-the-home network infrastructure in response to the competitive "threat" posed by Elon Musk's Starlink, its chief executive revealed yesterday.

Franklyn Butler told Tribune Business the BISX-listed communications provider will respond rapidly to safeguard its market share after Bahamian regulators licensed the Tesla and Twitter magnate's satellite Internet service provider to operate in this nation exactly three months ago.

Disclosing that its Aliv fibre network now passes 30,000 New Providence homes, he added that the product will "officially be launching" across several communities next week where homeowners will be given the chance to switch from Cable Bahamas' existing HFC (hybrid fibre coaxial) infrastructure so they can enjoy a "better experience" with broadband Internet and video TV services.

Acknowledging that the REV and Aliv operator has "had our challenges over the last few years" with customer service issues, Mr Butler also echoed industry regulator, the Utilities Regulation and Competition Authority (URCA), in saying he was "not sure we see a business case for 5G (fifth generation technology) in The Bahamas at the moment".

While Cable Bahamas and its Aliv mobile affiliate will monitor 5G's progress and evolution, he added that the group will only invest in technology where it "makes sense" and the returns to shareholders are clear. The Cable chief spoke as the company's turnaround strategy showed signs of gaining further momentum, with figures for the nine months to end-March 2023 revealing a positive $12.52m bottom line 'swing' to a $7.292m net profit for the period.

"We believe we are following the plan we agreed in the sense that we have got to continue to grow Aliv, and have got to continue to improve customer service across the group and see what we've got to do to win more market share," Mr Butler told this newspaper after Cable Bahamas maintained its 2023 financial year's consistent quarterly profit trend.

"That's what we've been working towards; making the company profitable, and making net income and not just EBITDA (earnings before interest, taxation, depreciation and amortisation). That has been a focus. We completed refinancing of our long-term debt in June last year and we've been focusing on how to be more efficient from a cost perspective even though there are headwinds on utility costs. That's something we didn't necessarily plan for."

The "utility costs" is a reference to the up to 163 percent increase in Bahamas Power & Light (BPL) fuel charge, compared to October 2022 levels, that the likes of Cable Bahamas and other major electricity users will suffer during peak summer consumption this year. Mr Butler said he did not have figures to hand on the likely increase in Cable Bahamas' year-over-year electricity costs, but indicated this is one of several challenges the group faces.

"I would say we're largely on track, but there's still a lot of headwinds," he told Tribune Business. "This is a business that is evolving. We see a threat from Starlink, which was licensed by URCA a couple of months ago. We have to improve our service, be alert to what is happening around the sector from a telecommunications perspective, and listen to our customers and meet their needs.

"We are in a digital transformation that started before the pandemic, and gathered speed through the pandemic, and we have to recognise that customers are serious about having their needs met." Cable Bahamas, in its feedback to URCA's proposed 2023 annual plan, said then that "the new and fast developing satellite to mobile industry, which is being pushed globally by new commercialised satellite companies, cannot be ignored".

Its statement proved accurate far quicker than it likely anticipated. For on February 15, 2023, URCA granted a class operating licence and class spectrum licence to Starlink Services Bahamas, which was represented by the Lennox Paton law firm. Starlink is an affiliate of Elon Musk’s SpaceX, which is not only seeking to offer satellite Internet services but also mobile services.

Starlink and SpaceX are backed by the considerable financial resources of Mr Musk, the Tesla/Twitter magnate and entrepreneur, who has been ranked by both Forbes and Bloomberg's Billionaires Index as the world's second richest man with an estimated net worth between $167bn and $176.2bn. Starlink's Internet and, potentially, mobile satellite services would also appear to have a market in the Family Islands where Cable Bahamas and BTC's networks do not extend.

"Starlink has a service people perceive as potentially being more reliable because satellite Internet, particularly in the Family Islands, where we don't necessarily have fibre, some people believe its more dependable and that's why we have to accelerate Alive fibre's roll-out," Mr Butler conceded to Tribune Business.

"We have 30,000 homes passed with fibre so far on New Providence, and we will officially be launching above the line in a few communities next week. We've been testing so far, using test customers for the most part. We'll now be allowing customers in areas where we have fibre to sign up for the service and convert from HFC to fibre so they have a better experience."

Cable Bahamas' $80m-$85m investment in its fibre-to-the-home network is also designed to compete head-on with BTC's similar infrastructure. Noting that Cable Bahamas will hold an official launch around May 22, Mr Butler added: "It's definitely gathering some steam. We had some challenges on the equipment side with one of our vendors, but we feel we've solved that.

"Aliv fibre is about making sure the customer gets a better service and better experience in keeping with when we launched Aliv a few years ago." Mr Butler said Cable Bahamas' fibre build-out on Abaco had gained a head-start post-Dorian, as the company rebuilt its network there using the technology.

Once the New Providence roll-out is completed, Cable Bahamas will then likely look at Eleuthera "first" before moving on to Grand Bahama, although this schedule could change depending on where major hurricanes strike The Bahamas. The BISX-listed communications provider is aiming to finish its work on New Providence by June 2025.

Turning to URCA's recently launched consultation on 5G, Mr Butler said Cable Bahamas will focus on improving the existing communications services it offers first as a "priority" in accordance with the regulator's wishes. "We continue to look at what could make sense, but I'm not sure if we see a business case for 5G in The Bahamas at the moment," he told Tribune Business.

"While we certainly have a plan, our hope is to leverage the assets we have and make sure we're responsible in our investment process. We want to focus on providing shareholder returns as opposed to choosing technology that doesn't provide a return to the shareholder.

"This industry never stops, and you can never get complacent. Circumstances change all the time, technology changes all the time. We have competitors chomping at the bit to gain our customers. We continue to be vigilant to improve service and give customers a better experience. We know we've had our challenges over the last few years, but are taking them head on and treating them as seriously and intently as we can. We hope our customers see the results."

Cable Bahamas' $7.292m profit for the nine months to end-March 2023, as opposed to the prior year period's $5.23m loss, was driven largely by a near-$10m increase in its top-line revenue. Mr Butler said the 6 percent growth, from $161.759m to $171.383m, was driven largely by its government and B2B (business to business) segments plus the Aliv mobile operator.

The same trend was seen for the third quarter, covering the three months to end-March, with revenues increasing by 6.7 percent year-over-year from $54.376m to $58.007m. Net profits more than doubled, rising 117 percent from $1.462m to $3.095m.

"As long as we have no external shocks such as hurricanes, which change things, we anticipate that we have set the foundation to continue to improve net income and results," Mr Butler said.

Comments

AnObserver says...

Wow, it is almost as if competition is good for consumers.

Posted 16 May 2023, 3:45 p.m. Suggest removal

ThisIsOurs says...

Tesla isnt magical, business is business. Revenue has to exceed costs. This same revolution was promised when Aliv hit the market

Posted 16 May 2023, 4:42 p.m. Suggest removal

SP says...

Due to Starlinks' ability to provide quality services at better costs, without hard connections like cable and fiber, Starlink will very quickly become the leader in telephone, cable, and internet services throughout the Bahamas within 6 to 9 months of start-up.

Whether BTC, Cable Bahamas, and Aliv are ready to face reality or not, Starlink is the future!

Cable Bahamas' $80m-$85m investment in its fibre-to-the-home network designed to compete head-on with BTC's similar infrastructure is a redundant exercise that won't amount to a hill of beans when Starlink rolls out.

The only instance when BTC, Cable Bahamas, and Aliv, might be of any prevalence to consumers is during a hurricane or severe weather event that would interfere with Starlink connections.

Otherwise, BTC, Cable Bahamas, and Aliv, will quickly become relics of the past!

Posted 16 May 2023, 5:47 p.m. Suggest removal

ThisIsOurs says...

Only time will tell. I listened to the excitement of some Bahamians at the mention of "*Tesla*" and "*Elon Musk*" and I wondered why we've never learned the lesson. The foreign investor comes here to make money for "**them**", as it should be, its their investment, there is no evidence of a direct correlation to vast opportunities emerging for us beyond minimum wage jobs. And if all you want is minimum wage jobs then ok, we surpass our expectations on every project. The next question is, what will the service cost? I cant imagine that operating satellites is cheap. And why here? I see benefits for Acklins but their population is small. Every disaster mgmt teams knows about the issue with satellite phones... is satellite internet immune from disruption during storms and bad weather? I fear we get excited too often when we hear money talking as opposed to really listening to what money is saying, Elon Musk = "*this will be a great opportunity for young people, get ready!*".. again. like all the other great opportunities the young people had that propelled them so far.

Our revolution comes with cheap energy, and the oil and gas lobby een having it. They already moving in on solar to block that path to cost effectiveness

Posted 17 May 2023, 1:49 a.m. Suggest removal

ThisIsOurs says...

Will there be a local office with employees? I can't see why they need one. And if there is, will they have the same employee relations as Twitter employees?

Posted 17 May 2023, 2:14 a.m. Suggest removal

DWW says...

Starling drops in every summer squall

Posted 17 May 2023, 8:11 a.m. Suggest removal

Sickened says...

This is true but once the squall or storm has passed you are guaranteed a signal again. Not so much with Cable or BTC after a hurricane and most likely during a hurricane.
Also the business rates for the Starlink are much more attractive than the rates provided by Cable - can't comment on BTC because I am now in the process of comparing BTC.

Posted 17 May 2023, 9:06 a.m. Suggest removal

bcitizen says...

I have been trying for 6 months to get my cable monthly statement emailed to my business email address. Signed up online 5 times to for a emailed statement. Talked to tech support and talked to my company rep. So far no statement gets emailed. So much for them being a tech company. These companies are lazy and do not give two shi(s of a rats a$$ about keeping their customers. I hope they go under. They suck big fat donkey balls and for no good reason other than being lazy and complacent.

Posted 16 May 2023, 7:18 p.m. Suggest removal

bahamianson says...

Rev upgrades every month and is still worthless.

Posted 16 May 2023, 8:17 p.m. Suggest removal

ThisIsOurs says...

Why are the sports stories suddenly disabled for commenting? Because we lost the football match? Another area where we ride on enthusiasm rather than reality. I heard a foreign footballer speak about their country's chances of moving up in world cup qualifiers and they very calmly talked about realistic options, taking into account the skill of their competitors. Their focus was more on their country's sport development effort, not so mich where they were now but the bright outlook for the future if they continued with the strategic plan

Posted 17 May 2023, 2:25 a.m. Suggest removal

DWW says...

Management is the issue. In abaco someone made the decision to rollout fibre only in treasure cay and man o war cay. Meanwhile btc was rolling out to marsh harbour and guess what happened... There are a lot more households in mh than TC and mow combined.

Posted 17 May 2023, 8:16 a.m. Suggest removal

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