Bypass traffic also affecting company
The Guyana Telephone and Telegraph Company Ltd (GT&T) has seen a decline in wireless revenue in the Second Quarter of 2008 of US$2 million, according to a Business Wire release on Atlantic Tele-Network Inc’s (ATN) financial results.
But parent company ATN expects that GT&T will generate approximately 15% of its total wireless revenue next quarter, although the competitive environment is still more difficult than in the past, leading to the decline in wireless revenue in that market.
According to ATN, “In Guyana, our wireless revenue decline reflects the continued impact of competition that entered the market in late 2006 and a decline in subscribers from 305,000 as of June 2007 to 277,000 as of June 2008.”
Another challenge to this quarter, the release noted, was a marked increase in bypass traffic – international traffic that bypasses the network in Guyana – costing the company revenue and because of the methods used presented a very poor quality experience for callers. However, ATN said, a variety of steps to counter this development had been taken and it is expected that there would be improvement in coming quarters.
ATN stated in the Second Quarter report that wireless revenue had increased by US$4.9 million or 25% to US$24.8 million from US$19.9 million. And of this increase, the U.S. rural wireless, despite the sale of 59 sites in the fourth quarter of 2007, saw revenue increase by US$4.0 million or 31% to US$16.9 million from US$12.9 million. An additional US$2.9 million was attributable to the consolidation of Bermuda Digital Communications (BDC), which represents operations from May 15, 2008 through June 30, 2008, offset by the US$2.0 million decrease in the wireless business in Guyana.
ATN said also that, “On the fixed line side of our business, we were pleased to see another quarter of growth. We increased the access lines in service in Guyana, had strong increases in high-speed data subscribers in the Virgin Islands and Guyana and continued to add business customers in Vermont and New Hampshire.”
Moreover, ATN reported that its Guyana operations increased their local telephone and data revenue by US$0.7 million, or 11% from US$6.6 million to US$7.3 million, as access lines increased from 124,000 lines to 135,000 lines, or 9% and interconnect fees increased.
ATN reported too that international long distance revenue, which is totally generated by its GT&T subsidiary, was US$12.4 million in 2008, a decrease of US$0.4 million or 3% from US$12.8 million in 2007. This decrease was partly a result of certain non-recurring events during the second quarter of 2007, including Guyana’s hosting of Cricket World Cup matches and the Rio Group Summit, which likely caused an increase in international traffic during that period.
ATN said that bypass activities increased considerably in the quarter, leading to lost revenue opportunities, with inbound minutes representing 86% of international traffic for the quarter.
In addition, ATN noted, the company recorded increased depreciation and amortiza-tion expenses associated with its network expansion in the rural US and Guyana. Such increases, however, were offset by the decrease in marketing expenses in Guyana, which had increased in 2007 in response to new increased competition, the release explained.
ATN reported that for the three months ending June 30, 2008, revenue was US$50.4 million, an increase of US$5.2 million or 12%, as compared to revenue of US$45.2 million for the three months ended June 30, 2007.
And net income was US$10.2 million for the quarter as compared to US$9.0 million for the same period in 2007, an increase of US$1.2 million or 13%.
Meanwhile, ATN also reported that wireless continues to drive its growth as the company’s rapid build-out of new markets in the rural United States more than made up for the two markets sold last year as it continues to see promising results from the extensive invest-ment made in new network coverage and capacity. The company’s wireless revenue also benefited from a partial quarter of consolidated results from Bermuda.
Telecommunications company ATN has its headquarters in Salem, Massachusetts, USA, and its principal subsidiaries include GT&T which is the national telephone service provider for all local, long-distance and international service, as well as a wireless service provider, in Guyana.
Other subsidiaries include Commnet Wireless, LLC, which provides voice and data wireless roaming services for U.S. and inter-national carriers in rural areas throughout the United States; Bermuda Digital Commu-nications Ltd.; Sovernet, Inc. in New England; and Choice Communications, LLC in the U.S. Virgin Islands.