Cable and Wireless Jamaica (C&WJ) was scolded by its parent for shrinking revenues by J$2.03 billion in its fixed line division - the move coincided with the departure of Rodney Davis.

The figure is actually equal to the entire profit that C&WJ made in its 2006/7 year. C&W plc, like an unhappy parent, cursed the Jamaica operations calling it a disappointment.
"Jamaica was a disappointment, although in the second half, with new management, we saw a noticeable improvement in its performance," said John Pluthero, Executive Chairman International, in the company's March 31, 2008 report. Phil Green replaced Davis as head of C&WJ.

Pluthero was upset because the Jamaica operations pulled down the performance of the international division, most notably Jamaica's domestic voice revenues.

"Domestic voice revenue fell by US$37 million to US$541 million. US$29 million (J$2.03 billion) of this reduction was in Jamaica relating largely to the poor performance of a prepaid fixed line product which we withdrew from the market in July 2007," said the C&W plc executive in its latest annual report.

C&WJ ended the year with a loss of $4.19 billion. It is mostly an accounting loss involving a $5.1 billion impairment, as it prepares to build out its new network. However, the troubling thing was its revenues which dropped to $22.8 billion from J$24.6 billion in the previous year. This affected its margins.

"All our businesses grew absolute gross margin with the exception of the Caribbean. The US$50-million fall in Jamaica's gross margin was due to the decline in their domestic voice revenue and increased mobile handset subsidies. Jamaica's performance was partially offset by the US$23-million increase in gross margin across the rest of the Caribbean," he added.

It's ironic that when Davis came to C&W, he quickly stopped disaggregating segment results. C&W Jamaica introduced the post-paid landline service in an attempt to stop customers substituting landlines for cellphones. Since Digicel's introduction in the market customers have dumped their landlines for cellphones. At first C&W benefited as customers were also substituting to their networks. But when the market became saturated at about 1.4 million cellphone users, the fixed line division needed new marketing to bolster its revenues. Ultimately it did not work.

Now C&W has discontinued the service, but existing prepaid landline customers must pay a set balance at the billing cycle or face permanent disconnection from the service.

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