While revenues were up in J$ terms, its revenues in US$ terms are down from US$90.6 million in the same quarter last year to US$88.8 million.  Currency depreciation is an important factor in assessing this subsidiary's results more particularly in UK sterling terms.

Its operating profit for the period under review was reduced from J$3.1 billion to J$2.9 billion with profit before tax falling from J$2.5 billion to J$2.3 billion.

The company's President and CEO, Rodney Davis has infused the organisation with a sense of competitiveness and it is now actively looking to gain ground on its main mobile competitor Digicel.

Indeed it is proclaiming that its active mobile base has increased by 9 per cent although it did not stipulate over what period and how it defines active.

What is not made clear though is what percentage of mobile customers are on the TDMA network as opposed to the GSM network and when does it intend to dispense with the TDMA network.

It is currently undergoing an intense marketing initiative that sees it pushing its new rate plan and says that this has contributed to its increase in revenues.  Its marketing spend would have been significant due in part to its 'Pressa' and 'Anytime' rate plan campaigns.

As a result of selling few handsets in the period under review, C&WJ said it made significant savings.

C&WJ'S gross margins fell slightly from 69 per cent in the previous quarter to 67 per cent in the December quarter.  With the rollout of its broadband offerings, increased marketing spend and the cost of doing business increasing its operating expenditure must have registered a notable increase.  However operating expenditure is down on the prior quarter and prior comparable period for last year.

Also its interconnect costs for the period under review would have also increased driven by the higher interconnect payments payable to other operators (primarily Digicel) as a result of the increase in their off-net national traffic caused by the rate reduction to J$10/J$8 for off-net traffic.

The company also took the opportunity to release news of a pension surplus.  But did not specify the value of the favourable adjustments.  For the quarter.  It must be said that this must have had a huge bearing on its results.

C&WJ's Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) margin increased from 26 per cent over the previous quarter to 31 per cent in the quarter ended December 31, 2005.  In J$ terms EBITDA increased by 22 per cent over the previous quarter.

At an Investors Briefing hosted by Dehring Bunting and Golding next Wednesday Rodney Davis and his executive team will discuss its most recently published quarterly financial statements and outline plans for greater efficiencies and increased growth.

http://www.jamaicaobserver.com/magazines/Business/html/20060216T210000-0500_98852_OBS_BROADBAND_BOOSTS_C_W_J_S_REVENUES.asp