GT&T Wireless subscriber base increases by 64,000
… but marketing budget jumps threefold during first quarter
Kaieteur News
May 6, 2007
The Guyana Telephone and Telegraph Company (GT&T), a subsidiary of Atlantic-Tele Network (ATN), nearly tripled its market budget for the first quarter of 2007 as the company sought to fight off aggressive competitor Digicel.
According to first quarter declarations by ATN, Wireless revenue in Guyana increased by approximately US$2 million, which reflects the growth of GT&T's wireless customer base from 246,000 subscribers to 310,000.
Of this number, approximately 262,000 use GSM service, as compared to 136,000 GSM subscribers a year ago and 215,000 at the end of December 2006.
Chief Executive Officer of ATN, Michael Prior, said that he is especially pleased that the team was able to continue increasing subscribers in the face of a more aggressive competitor in Digicel.
However, subscriber growth cost nearly three times as much on sales and marketing than a year earlier, with much of it on handset promotions.
“While we are unlikely to continue that level of spending indefinitely, we believe that it is in GT&T's long-term interests to continue to be aggressive in its marketing activities,” Prior said.
ATN's operating expenses increased by US$7.2 million, from US$23.0 million in 2006 to US$30.2 million for the first quarter in 2007 respectively.
Of this increase, US$3.0 million is attributable to increased sales and marketing efforts at GT&T, including wireless handset promotions, advertising and sales commissions. ATN is a telecommunications company with corporate offices in Salem , Massachusetts and St. Thomas , U.S. Virgin Islands .
According to a press statement released by ATN, for the first quarter of 2007, revenue was US$43.5 million, an increase of US$9.0 million, or 26 percent, as compared to revenue of US$34.5 million for the first three months of 2006.
In the first quarter, net earnings were US$6.9 million as compared to US$4.1 million for the same period in 2006, an increase of US$2.8 million.
For wireless revenue, the major factors driving growth were similar to previous periods, which were primarily based on network expansion and traffic growth in the rural United States and network expansion and subscriber growth in Guyana .
Additionally, ATN completed the acquisition of Sovernet, Inc., a Vermont telephone and data services provider, in February.
“All in all, it was a good start to the year,” Prior said.
According to Prior, revenue from the company's expanding wireless operations continues to be the main driver of growth, but other revenue lines also showed healthy increases for the quarter.
“Local telephone and data revenues benefited from a full quarter of Sovernet's operating results, from slow but steady growth in access lines in Guyana and from strong demand for our wireless broadband services in the U.S. Virgin Islands,” Prior explained.
He added that international long distance revenues, which are generated primarily by calls terminating on ATN's wireless and wireline networks in Guyana , grew nicely after many flat quarters.
Prior noted that this was helped in part by Guyana's hosting of the Cricket World Cup matches in late March and the Rio Group Summit in late February.
Local telephone and data revenue generated by Guyana and Virgin Islands operations increased by US$800,000, while Access lines at GT&T increased from approximately 114,000 to 123,000, representing an eight percent turn around.
International long distance revenue and other revenue, all of which are generated by GT&T, was US$12.9 million during the first quarter, an increase of US$1.7 million, or 15 percent, from US$11.2 million in 2006.
This increase resulted from a substantial growth in wireless subscribers within Guyana (for both GT&T and its competitor, which uses GT&T's international network) and certain non-recurring events during the quarter, such as Guyana's hosting of Cricket World Cup matches and the Rio Group Summit, which helped drive traffic volumes to unexpected levels.
ATN's principal subsidiaries include: GT&T; Commnet Wireless, LLC, which provides voice and data wireless roaming services for U.S. and international carriers in rural areas throughout the United States; Sovernet, Inc., which provides wireline voice and data services to businesses and homes in New England; and Choice Communications, LLC, which provides wireless television and wireless broadband services, as well as dial-up internet services in the U.S. Virgin Islands.
The company also owns 43 percent of Bermuda Digital Communications Ltd., which, under the Cellular One name, is the largest provider of cellular voice and data services in Bermuda .