CABLE & Wireless Communications (CWC) cut 650 staff, or 18 per cent of its employees, in the Caribbean over the last year.

The company, which operates as LIME in Jamaica and which had 3,028 full-time staff in the Caribbean at the end of September, saved US$18 million during the six months to September 30, but it says it plans to intensify cost cutting measures over the next 18 months.

“The Caribbean has been the focus with operating costs reducing by US$18 million in the first half and we expect to step up the pace in order to meet our US$100-million target,” said Tony Rice, CWC’s outgoing CEO.

The telecommunications firm is targeting the multimillion cost reduction across the group — which also operates in Panama and Monaco — on a run rate basis within two years, in light of declining revenues.

“Operating costs at US$272 million reduced by six per cent compared with the prior period as we began to realise the benefits of the ongoing cost reduction initiatives,” added Rice. “We have now successfully outsourced our field services teams in Jamaica and Barbados.”

Redundancy and restructuring costs predominantly related to the outsourcing of support services in the Caribbean cost CWC US$43 million during the six months to September 30.

But CWC also has another target in mind — achieving a Caribbean earnings before interest, tax, depreciation, and amortisation (EBITDA) margin in excess of 30 per cent in the medium term.

Indeed, it increased its EBITDA margin from 25 per cent during the six months to September 30, 2012, to 26 per cent in the first half of the current financial year, although that had more to do with a smaller revenue base than the modest profit growth.

EBITDA grew by one per cent year on year to US$138 million during the six months to September 30, but revenue dipped by US$32 million, or by six per cent year on year to US$521 million during the first six months of the current financial year, which runs to next March.

All revenue streams, except mobile, declined as the drop in average revenue per user (ARPU) outpaced the growth in usage of high-speed data services and exacerbated the reduction in fixed line subscribers.

The telecommunications firm recorded US$130 million in fixed line revenue for the six-month review period, reflecting a 13 per cent decline in income as the number of fixed line subscribers fell from 713,000 at the end of September 2012 to 696,000 as at September 30, while ARPU dropped by 11 per cent, from US$34.90 per month to US$31.10.

Broadband (and TV) revenue fell by two per cent year on year to US$59 million, despite registering five per cent more subscribers at the end of September this year compared to year-earlier levels. ARPU fell from US$42.10 per month to US$40.50.

For mobile, the two per cent growth in subscriber base over the 12 months to September 30 — led by a “23 per cent rise in Jamaica subscribers” — translated into higher revenue, despite lower ARPU of US$27.50 month, compared to US$28 a year earlier.

“Mobile revenue rose one per cent in the first half to US$264 million as demand for mobile data continued to increase with (mobile) data revenue growing 18 per cent),” said CWC’s interim management report. “We expect this shift in mix from voice to data to continue as we invest in high speed networks including Long-Term Evolution (LTE) in The Bahamas and Cayman (expected to launch in both markets by next March).”