LIME sees 25% rise in mobile subscriber base
LIME reduces losses and increases subscriber base
TELECOMMUNICATIONS company LIME added 35,000 mobile subscribers to its network during the third quarter last year, pushing its operating profit up by 25 per cent.
Operating profit before interest, tax, depreciation and amortisation (EBIDTA) was J$792 million during the three months to December 2013, up from $631.9 million during the comparative quarter in the prior year.
Even so, the company made a loss of $315.5 million during the quarter under review, an improvement of the $437.5 million it made in the prior year.
Revenue dropped by 18 per cent, down from $$6 billion during the three months to December 31, 2012, to $4.9 billion during the quarter under review as a result of restructuring the Global Directory Services contract and a reduction in national fixed-line retail rates.
42 per cent increase in mobile revenue
"Our performance continued to improve steadily in the quarter ended December 31, 2013, with a 23 per cent increase in active subscribers and a 42 per cent increase in mobile service revenue over the same period last year," said Garfield Sinclair, CEO of LIME Jamaica.
He added: "The rate of mobile data adoption was especially encouraging during the Christmas period, where customers migrated to our affordable enabled handsets and data plans in unprecedented numbers."
Moreover, the company said its fixed voice and Internet service bundle, Browse and Talk continues to reduce fixed-line churn and yielded a 30 per cent growth in broadband margins compared to the comparative quarter in the prior year.
Fixed-line voice margins for the combined international and national were flat year-over-year.
LIME incurred a restructuring expense of J$120 million, following a voluntary redundancy program undertaken during the quarter.
Its operating expense totaled $2.7 billion during the quarter under review, a 7 per cent increase over the comparative period in 2012.
Despite reduced usage following effective cost containment measures, higher utility charges continue to impact operating costs due to the continued devaluation of the Jamaican dollar and higher oil prices, the company said.
"The increase in administration, marketing and selling expenses, which include consulting fees for the outsourcing arrangement, was offset by the reduction in employee expenses as a result of the outsourcing agreement with Ericsson for service delivery," LIME added.
LIME says it is working with the Jamaica Stock Exchange (JSE) to resolve a breach of the JSE rule - 402 - due to minority shareholders holding less than 20 per cent of the company.
Speaking with Caribbean Business Report yesterday, Chairman of LIME, Chris Dehring said: "Our good fortune is down to perceived value by subscribers. Many people did not know what rate they were paying before. We announced that we would be lowering our rate thus creating better value. We now offer a rate of $2.99 per minute which has caught the attention of the public, and people are realising that they are getting a better deal with us.
"Jamaicans can use a LIME phone and call a Digicel phone and it still works out cheaper than calling a Digicel to Digicel phone. We are now on an upward trajectory and this has been due to a hard- working team effort led by our managing director Gary Sinclair who has been absolutely fantastic. We remain committed to turning this great Jamaican company around."