CABLE & Wireless is about to invest millions into moving more of its network infrastructure below ground to prevent downtime from hurricanes. The investment comes as part of funds its parent company, Liberty Latin America Limited (LILA), will be spending to move 170 kilometres of its core network/backbone underground across the Caribbean as it looks to build back in certain jurisdictions from Hurricane Beryl.

This was announced by LILA President and CEO Balan Nair on the company’s earnings call on August 7. He noted that the company would be rebuilding its backbone and put that entire infrastructure underground for its larger Caribbean markets such as Panama, Jamaica, The Bahamas, Puerto Rico, Barbados, and the British Virgin Islands. LILA is the ultimate parent company of Cable and Wireless Jamaica Limited (CWJ).

According to Flow Jamaica’s General Manager Stephen Price, “The ‘backbone’ refers to the core network that feeds data transmission to subsidiary networks. It is the central conduit that transfers network traffic at high speeds via fibre optic cables and provides the core infrastructure for data communication.”

With respect to Jamaica, he explained, “One may consider the backbone as a main highway that has different exits for persons to continue their journey on local road networks. To better protect our infrastructure from future natural disasters, we will be relocating our transmission backbone between May Pen and St. James underground. This investment will not only protect our infrastructure but further provide a more reliable service for our customers when faced with natural or man-made disasters. In addition, our network in Jamaica is further bolstered because our subsea festoon network surrounds the island with seven different landing points and provides another layer of redundancy which helps to ensure we stay online.”

While Hurricane Beryl did cause some disruption to Flow Jamaica’s network, Price noted that mobile population coverage is now at 96 per cent, just below pre-Beryl coverage of 97.4 per cent, but an improvement to the 77 per cent coverage on July 8. Despite more than 1,700 communities being impacted by Beryl on its fixed network, only 52 communities have yet to be fully restored. This reiterates a point made by the LILA CEO about the fixed network across the Caribbean withstanding the impacts of Hurricane Beryl.

“The entire Flow team remains resolute in achieving full restoration for all customers in the shortest possible time. To this end, a team of 30 highly skilled technicians from our sister companies, Liberty Costa Rica and Más Móvil [Panama] will be supporting our local technicians to reinforce our network repair activities. We have also secured several generators to energise our sites that are currently without commercial power,” Price explained on the efforts being undertaken to get Jamaica back online.

With respect to the seven damaged towers in Jamaica, the repairs are going to be handled by Phoenix Tower International (PTI), which became responsible for 1,300 mobile tower sites across the Caribbean in December 2023. St Elizabeth is still being brought back online as electricity is restored to the parish.

Price added, “PTI is currently assessing the restoration needs and has committed to effecting repairs within a reasonable time frame.”

LILA noted in its earnings release that Jamaica, Curaçao, St Vincent, and Grenada were impacted by Hurricane Beryl, with the smaller Caribbean islands having significant damage. LILA has rebuilt the mobile network and is using alternative technology with fixed wireless access to enable communication for customers on its fixed network on a cost-effective basis.

Hurricane Beryl is expected to cost US$10-US$20 million in revenue and adjusted operating income before depreciation and amortisation (OIBDA) for the latter half of 2024, with the impact to primarily occur in the current third quarter. They will also be spending an extra US$10-US$20 million to replace infrastructure and equipment that was damaged beyond repair or to enhance its network resilience. LILA is still assessing the impact of Beryl on its homes passed and subscribers.

LILA is also set to collect a net amount of US$44 million ($6.85 billion) from its weather derivatives which will be reflected on its income statement as a derivative gain. Weather derivatives are a financial instrument that allows the buyer of the derivative to collect an annual premium and agree to pay out to the seller of the derivative if there is a weather event. In this case, Beryl was a Category 5 hurricane, and instead of needing other conditions or proof of damage, LILA was able to claim on the derivative. LILA had US$62.3 million in premiums amortised over the last two years for the derivatives.

According to LILA’s Q2 release, Flow Jamaica had 15,900 less prepaid mobile users related to the mobile 2G network shutdown. Jamaica has 1.21 million mobile subscribers or 62 per cent of C&W Caribbean’s 1.95 million mobile subscribers as of June 2024. This was also the 16th consecutive quarter in which Flow Jamaica added subscribers.

While Cable & Wireless Communications Limited doesn’t segregate its Jamaican segment in its quarterly report, its C&W Caribbean segment revenue grew three per cent, rising to US$368.30 million, with the six months period rising to US$732.50 million. Adjusted OIBDA was US$157 million as well.

CWJ’s 2023 revenue rose seven per cent to $40.95 billion, with its operating profit improving 11 per cent to $6.49 billion. However, the rise in finance costs resulted in its loss before tax rising 249 per cent to $772 million, with the net loss at $498 million.

Total assets were up three per cent to $57.78 billion with non-current assets at $43.97 billion and cash at $1.94 billion. CWJ’s annual general meeting is set to be held virtually at 1:00 pm at September 5.

“We continue to be supported by our parent company and other subsidiaries as we continue restoration efforts and the strengthening of our network to respond to any future threats. We also understand the challenges that are still being experienced by those who were most [impacted] by Hurricane Beryl. For the residents of St Elizabeth and Clarendon in particular, the Flow Foundation has provided humanitarian aid in the form of care packages, food items, and uniform vouchers to ease the back-to-school demand on parents at this time.

“We’d like to thank our loyal customers for their patience and understanding during this period and wish to assure that we are doing everything in our power to make every day better,” Price closed.