© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, ladies and gentlemen, and thank you for standing by. I'll now turn the call over to Kerry Scott, Senior Vice President, Chief People Officer.
Good morning, ladies and gentlemen, and welcome to Liberty Latin America's Second Quarter 2018 Investor Call. This call and the associated webcast are the property of Liberty Latin America, and any redistribution, retransmission or rebroadcast of this call or webcast in any form without the expressed written consent of Liberty Latin America is strictly prohibited. [Operator Instructions] Today's formal presentation materials can be found under the Investor Relations section of Liberty Latin America's website at www.lla.com. Following today's formal presentation, instructions will be given for a question-and-answer session. As a reminder, this call is being recorded on this date, August 9, 2018. Page 2 of the slides details the company's safe harbor statement regarding forward-looking statements. Today's presentation may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical fact. These forward-looking statements involve certain risks that could cause actual results to differ materially from those expressed or implied by these statements. These risks include those detailed from time to time in Liberty Latin America's filings with the Securities and Exchange Commission, including its most recently filed Form 10-K and Form 10-Q. Liberty Latin America disclaims any obligation to update any of these forward-looking statements to reflect any change in its expectations or in the conditions on which any such statement is based. Also note that nothing stated on today's call constitutes an offer of any securities for sale. I would now like to turn the call over to Liberty Latin America's CEO, Mr. Balan Nair.
Thank you, Kerry, and welcome, everybody to Liberty Latin America's second quarter results presentation. Today, I'm once again joined by my senior leadership team from across the region, and I will get them involved as needed during the Q&A.
For our agenda today, I'll start by taking you through our highlights for Q2 before providing an update on our recovery in Puerto Rico and going into some detail of progress across our consumer and B2B operations. I'll then wrap up with some examples of how we are working towards our strategic vision, which we continue to believe will result in the creation of sustainable top line and free cash flow growth for our company. Chris Noyes, our CFO, will then make some prepared remarks regarding our Q2 financial performance. And after that, we will get straight to your questions. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com. Starting on Slide 4, with the key highlights for the quarter. Building on a solid start to the year, we added 61,000 RGUs in Q2, driven by a record number of quarterly broadband gains as we benefited from fixed line initiatives we've put in place at C&W and continued the strong execution at VTR in Chile. In Puerto Rico, our network is now almost fully restored and I am pleased to announce that we delivered our first quarter of net additions since the hurricanes hit last year. This is also our best organic net additions performance at Puerto Rico since 2014. Further, our footprint expansion across VTR and Cable & Wireless is continuing at a pace with over 160,000 homes added or upgraded, year-to-date. Building on our leading networks, the new products we talked about last quarter are supporting our current performance, and we continue to innovate in our markets. Recent examples being our new streaming application, VTR Play in Chile, and the Go streaming product in Puerto Rico. Recall that these are our largest video markets, representing 3/4 of our base. As I mentioned last quarter, we also launched the EVO Enhanced Video Platform across Cable & Wireless's Caribbean markets, which supported our organic video subscriber growth of 15,000 in the quarter. Finally, we see a significant opportunity in our B2B business, which represents about 30% of our total revenue across Liberty Latin America. The opportunities in B2B are sizable, and we intend to leverage our Cable & Wireless products across the group. I will go into this more closely in the coming slides. Moving to Slide 5, we are now nearing the end of our recovery work in Puerto Rico, and we are encouraged by the business performance to date. We also see positive signs for the Puerto Rican economy, which is heartening.
Now, starting with the restoration of our network. As expected, we are now close to completing the restoration process, with 100% of our nodes online today, and our focus has now moved to small pockets left without service, which is a door-to-door exercise. We are disciplined in our approach and looking to reconnect as many customers as we can as quickly as possible.
By now, you should be familiar with the chart on the right-hand side of the slide. As of last Friday, we had 717,000 RGUs compared to a base of 804,000 before last year's hurricanes. And 669,000 billable subscribers or over 90% of our current base. We have a number of initiatives in place to convert the remaining customers from nonbillable to billable. For example, we have focused sales teams accompanied by engineers, targeting areas with lower levels of billable customers. We are continuing to send e-mails, text messages and announcements through social media, and if we still haven't heard from our customers we send them correspondence confirming their services are available, often including offers to further encourage them to reconnect. These activities led to an average daily conversion rate of around 500 subscribers in July. With the network pretty much restored through our employees, we're back to business as usual. And the results demonstrate this. As I mentioned on the previous slide, we're now back to adding RGUs on a net basis, with 11,000 net organic adds in Q2, a great achievement, given where we've come from in the past year. This has been driven by strong sales as we look to be the first provider to both existing and new customers. Note that sales in Q2 were stronger than last year's second quarter. In fact, June saw our best monthly sales in 2 years. Why are customers coming to us? Our product offerings continue to resonate in the market, led by top speeds of up to 300 megabits per second and bull's-eye speeds of 100 megabits per second, which are the fastest available across the island. Further, our proactive and fast outreach efforts have also helped to retain customers who appreciate the commitment of our Puerto Rican team through this period of adversity. In fact, NPS scores, which are universal metric for customer satisfaction are at the best level since we begin measuring it in mid-2016. From a financial perspective, these operational strides are driving improved performance as we continue to generate growth on a sequential basis as you can see at the bottom right of the slide, including doubling our OCF in Q2 as compared to Q1 of this year. We also received further good news earlier this week, when the SEC confirmed that we will receive $11 million of the $51 million Phase 1 funding program for hurricane relief in Puerto Rico. This is positive for our liquidity and recognition of the investments we have been making in the market. And lastly, on this page, we remain on pace for a monthly run rate OCF of around $14 million at the end of 2018, which we mentioned on our previous call. In the next couple of slides, I will cover some of our Q2 operational highlights and also walk you through our B2B operations. On Slide 6, I'll first look at our consumer businesses, which operate across 20 markets in total.
Let me start on the left with our fixed line services, accounting for half of our total Q2 revenue. Broadband is the fastest growing and largest part of our fixed line residential business. This is increasingly the lead product when a customer chooses their service provider and we pride ourselves in delivering fast and effective products. For example, we deliver top speeds of above 100 megabits per second in all of our largest markets. We have bull's-eye speeds of 100 and 200 megabits per second in markets such as Chile and Puerto Rico. In fact, in Chile, over 50% of our base now enjoys broadband speeds of greater than 150 megabits per second In addition, we have now deployed in excess of 900,000 WiFi Connect Boxes, delivering differentiated in-home connectivity to 40% of our broadband base of over 2 million subscribers all of which contributed to our record broadband adds of more than 45,000 RGUs in Q2. At the same time, video entertainment remains an important element of our web value proposition, and we are excited to have launched our new multiscreen app called VTR Play in Chile and Go in Puerto Rico. These applications are based on the Horizon Go App developed by Liberty Global, and enable our customers to access their video content, however they choose, either at home or on-the-go. And at C&W, our new video platform in the Caribbean markets, Flow Evo, has been supporting NPS and is leading to improve operational performance. Finally, in relation to footprint growth, we have continued to invest in expanding and strengthening our networks, adding or upgrading over 160,000 homes in the first half of this year. We are tracking well to our full-year target of more than 250,000 homes added or upgraded in 2018. And supported by the great products, which I just mentioned, and our commitment to innovation, we continue to see a multiyear run rate of opportunity for network expansion. Moving to the right-hand side of the slide for our residential mobile business, which accounts for 20% of our revenue. Here, our key focus is on delivering the fastest mobile connectivity. Today, we have LTE and VTR through our MVNO and in 13 of Cable & Wireless's 16 MNO markets, recently adding LTE in Dominica. Undoubtedly, mobile remains a highly competitive business in our markets, but one thing we know for sure is that people in our region, like the rest of the world, are embracing mobile data albeit at an early stage.
As you can see from the chart in the lower right-hand of the slide, LTE subscribers have been up strongly across LLA, increasing over 60% year-over-year and we feel there is plenty of room for this to grow. We broke through the 1 million LTE subscriber mark in Q2. However, this is still less than 30% of our overall mobile subscriber base. Our LTE users consume more data than non-LTE users, so we had seen more usage as customers move to LTE, and we believe that this is set to continue, particularly as we introduce combo plans with bundles of voice data and text, encouraging customers to experience the benefit of mobile data.
This increased data usage by our customers, both in fixed and mobile creates additional demands for our network, and this is where we are well placed to leverage our unique combination of terrestrial, mobile and subsea infrastructure to great effect.
Finally, on this slide, I wanted to highlight the important digital transformation opportunity for LLA. We have been doing some important work across the group. In some cases, although a few years to position ourselves at the forefront of the industry as it moves toward a model of digitization, which will drive improved experiences for our customers and reduce our cost to deliver services.
For example: in Chile, we have begun to roll out a new digital platform this year and are excited about its potential to further differentiate VTR and improve our customer interactions. This was supported by the transformation of our underlying OSS and BSS systems and the redesign of our internal processes for the future. Some examples of the program's benefits are: it has automatized and simplified processes; it allows customers to better and more easily use self-service digital channels; the program enables efficient channel management; and it enables improved first contact resolution through better empowerment of our customer care executives. Note that this was a transformative journey which we began 3 years ago in VTR, and we expect to reap the fruits of these exercises in the coming years.
At present, we have just begun the migration of our subscriber base to the new OSS/BSS system and aim to complete the transition in the coming months. Our plan is to expand this digital transformation across our region without reinventing the wheel. The customer journey work is completed. The benefits are clear. The implementation team is experienced and this gives us another tool to create magical moments for our customers. Moving to Slide 7, where I want to talk about our B2B services and frame the opportunity as we see it in the business that today generates close to 1/3 of our total revenue. Starting on the left with our platform and how we see it evolving. We are currently the preferred partner for our customers, providing a comprehensive suite of solutions over our carrier grade network, with both businesses and governments benefiting from our unique combination of network assets. We connect over 40 markets in the region with our subsea network and have consistently been recognized as the leader in the region by the Global Carrier Awards. Our solutions focus on the core competencies of speed, service, simplicity and security. We utilize the full array of network types to cross connectivity services such as for data networking, like SDRAM, ethernet and MPLS; for voice services, hosted VOIP and traditional; for security services where we provide endpoint solutions to firewalls, to anti-DDoS protections, and for IT-as-a-service solution like disaster recovery, storage and backup and other infrastructure components. As we look to future areas of growth, in addition to core services, we will look to offer our customers responsive sophisticated solutions, once again using our networks while also leveraging our data centers, including a Tier 4 facility in Columbia, an internationally recognized cloud-based solutions such as Disaster Recovery as a Service. Looking at the chart on the right-hand side of the slide, we see significant opportunities to grow our B2B business. We estimate that the B2B market in our key geographies is at least $8 billion to $9 billion in size and growing. While we are unencumbered in several Caribbean markets with strong market share, we are also an attacker in several Central American geographies and certainly in Chile and Puerto Rico, where we estimated we have single-digit market share today, but with plenty of upside potential. Leveraging the capabilities of Cable & Wireless in the small nascent operations have the potential to create significant value. On Slide 8, I wanted to wrap up with an update on some of our other achievements since the split off from Liberty Global at the end of 2017. 2018 is our first year as a separately listed public company, and much of our focus is on creating the right organizational structure to then enable us to succeed in unlocking the opportunities on this slide. One of the key elements here is our culture, and I'm particularly pleased that we are quickly building one that is centered on innovation, entrepreneurship and teamwork. This will lead to improved understanding of our customers' needs and help us generate the best possible solutions for them.
Operationally, I'm excited about the digital transformation opportunity for our company, which I mentioned earlier. This is a key strategic focus area for us and although we are early in realizing the benefits, we plan to roll out similar projects in the future, leveraging our scale across the region. To conclude, we have had a strong operational quarter, particularly with respect to the record broadband gains we achieved, and we've got exciting plan for the future as we begin to benefit from the foundational work we are doing this year.
I'll now pass you to Chris Noyes, our Chief Financial Officer, who will go through our Q2 performance in greater detail. And I look forward to your questions after that. Chris?
Thank you, Balan. I will begin on Slide 10 and summarize our Q2 2018 fixed and mobile subscriber results.
Our fixed RGU momentum continued from the first quarter as demonstrated by the addition of 61,000 subscribers in Q2. C&W delivered 29,000 RGUs, driven by product and service enhancements and continued network upgrade and expansion, with growth coming from Jamaica and Panama. VTR posted 22,000 RGUs, a good quarterly result in a key selling season of the year. And as mentioned earlier, we are back to subscriber growth in Puerto Rico, with 11,000 RGU additions in the quarter. In terms of RGUs by product, we delivered growth across each of our 3 product lines, including record additions in broadband and our strongest video performance in 5 years. Of our 45,000 broadband additions, VTR delivered a gain of 27,000 RGUs, their best quarterly performance in 2 years while C&W added 11,000 RGUs, with solid performances from Jamaica and Panama and LCPR contributed 7,000 RGUs. Of our 15,000 video RGU additions, C&W had a gain of 8,000 RGUs, our best quarter in this segment since our acquisition 2 years ago, while VTR added 8,000 RGUs and LCPR lost 1,000 RGUs.
Rounding out our products, we had modest to less new additions, with subscriber gains of 10,000 at C&W and 5,000 at LCPR, offset in part by a loss of 13,000 at VTR, a trend that we anticipate will continue. Moving to mobile, we lost 76,000 subscribers during the quarter. As the chart highlights, VTR added 13,000 postpaid subscribers in Q2 as we continue to successfully upsell the Chilean cable base, with roughly 80% of sales going to existing customers. However, these additions were more than offset by C&W's loss of 89,000 mobile subscribers. The bulk of this loss was in prepaid, which can exhibit higher volatility from quarter-to-quarter and occurred in the competitive markets of Panama, Jamaica and Bahamas. Our quarterly results in both Panama and Jamaica also reflect a more targeted approach to promotional activity. Slide 11 provides a snapshot of our consolidated Q2 2018 financial results. Overall, we reported $922 million in revenue and $353 million in OCF, with rebased declines in revenue and OCF as expected from the continuing impacts of the hurricanes last year, which we will start to lap at the end of Q3.
Turning to P&E additions. We totaled $218 million in Q2 or 24% of revenue as compared to $171 million or 19% of revenue last year. The principal driver of our year-over-year P&E increase directly relates to our hurricane restoration efforts, which totaled $42 million during Q2. Adjusted free cash flow as illustrated in the bottom left corner of the slide was a negative $14 million in the quarter, down significantly versus the prior year, driven primarily by higher cash CapEx.
Moving to the last 2 bottom boxes, our balance sheet remains strong as we are substantially fixed on interest rates, hedged on currency and have minimal near-term debt maturities. Our net leverage position on an LQA basis has moved down about 1 turn since year-end to 4.2x at June 30. With a consolidated cash position of over $700 million and untapped revolving credit facilities approaching $1 billion. It should be noted that we expect to use a portion of our cash balance to help fund the Cabletica acquisition, which is targeted to close in the second half of this year. Moving to Slide 12, I will provide more detail on the second quarter financial trends for each of our 3 segments. On the left-hand side of the slide, Cable & Wireless posted revenue of $584 million in Q2. This is slightly down year-over-year on a rebase basis as 2% rebase growth in our fixed residential business driven by RGU gains was more than offset by a 5% rebase decline in our mobile residential revenue, primarily driven by the Bahamas and Panama. In addition, our rebase revenue result was adversely impacted by a $5 million one-off benefit in last year's Q2. Q2 OCF for C&W was $224 million, which is slightly lower compared to the prior year period on a rebased basis, largely following the revenue result. P&E additions were $102 million in total or 17% of revenue, which is consistent with the prior year and included over 40,000 new build and upgraded homes in Q2. In the middle of the page, VTR reported revenue of $260 million in Q2, up 5% year-over-year on a rebased basis. On the OCF front, VTR delivered $105 million, representing 7% rebased growth. Our rebased growth was mainly supported by volume increases across fixed, mobile and B2B as well as an increase in our ARPU per fixed subscriber and continued operational leverage of our cost base.
With respect to P&E additions, VTR reported $59 million or 23% of revenue during Q2. Incremental spend as compared to last year's Q2 was primarily focused upon additional network capacity, IT platform investments and CPE. In addition, we also continue to expand and improve our Chilean network by adding and upgrading over 40,000 two-way homes during the quarter. And lastly, Liberty Puerto Rico generated $80 million of revenue and OCF of $36 million. This represents a material decline versus the second quarter of 2017, but with solid improvement from Q1 2018 as highlighted earlier. During the quarter, our P&E additions totaled $45 million, the majority of which relates to the tail end of our hurricane network restoration efforts. This is a good segue to my next topic, insurance recovery. We continue to spend considerable internal energy working through the claims process. On the positive side, we were notified just this week that we will receive a second advance payment of $20 million on our policy, which brings our aggregate net insurance advances to $50 million to date. We expect this advance to arrive within the next 2 months, and then a majority of the amount will be directed to Puerto Rico. As I have mentioned on our previous earnings calls, these advances are not a settlement, but simply advances on what is expected to be a larger total payout. We believe full resolution of our claims will take at least until the end of the year. Turning to the final page of today's presentation. We delivered solid Q2 fixed subscriber additions across many of our key residential markets. Our Puerto Rican recovery is in full swing, and as we move into the second half of the year, we expect comp favorably versus last year's hurricane-impacted H2. Our operating teams are focused on enhancing our fixed and mobile capabilities and delivering to our customers' best-in-class products and exceptional customer service, which we believe should ultimately drive future revenue growth.
And lastly, on the back of our results today, we remain on track to deliver our 2018 guidance and are setting the stage for 2019. With that, operator, we are ready to take questions.
[Operator Instructions] We'll take our first question from Diego Aragão with Goldman Sachs.
Two questions, if I may. The first one is regarding to the competitive landscape in the Cable & Wireless region. If you can walk us through the most recent developments in these markets in terms of pricing for both mobile and the wireline business that will be great. In particular, it will be great if you can provide some details about the competitive position of Digicel at this point.
Sure. Thanks for your question, Diego. So in the Cable & Wireless market, we are -- certainly in the Caribbean islands, we are starting to see some positive trends. We've taken some price increases, and we have a competitor there that's equally interested in profitability. And we see the opportunity coming up as somewhat positive.
Secondly, we've also spent some fair amount of capital on upgrades, little bit of new construction and it's starting to pay off, you'll see that in our fixed line growth as well in like Jamaica and Trinidad. And so -- we see some positive. We think it's going to be a very, very rational market. We have a competitor there that's also acting very rationally, you've seen them take some price increases. And we feel good about it. I'll ask Betzalel, if you have anything you want to add to that? Or Inge?
Thank you, Balan, I see that you're spot on. In Jamaica, we see price increase -- we increased our prices in the last quarter and we have seen that Digicel is increasing prices this week. If you have -- the market is managing very rationally, the value proposition, the increase in quality and value that we're offering to our customers especially on mobile moving into LTE. So we are not too concerned, I think that we are managing our position in the market in a rational way.
That's perfect. And the second question is related to your balance sheet. You just ended the quarter at 4.2x net debt to EBITDA and as you continue to deleverage the balance sheet, I was wondering if you can share with us your most recent views about your targets and how should we be thinking about your leverage over the next, let's say, 2, 3 years.
I think from a leverage standpoint, the Liberty family is -- we're always comfortable between 4 and 5. But in Liberty landmark, will be close to 4 than 5. And there will be a natural deleveraging effect here with the Puerto Rican recovery. And -- but you'll see -- our story is still a levered equity model story. But we are a lot more comfortable closer to the number 4.
We'll take our next question from James Ratcliffe with Evercore.
Two, if I could. First of all, in Puerto Rico, the OCF margins expanded faster than we have expected and it looks like you're well on track getting that $40 million plus number. Can you talk about what the margin profile of that business looks like, post hurricane? And is there anything you've been doing in terms of the rebuild that actually could improve the economics going forward? And secondly, if you talk about capital intensity, once the hurricane recovery is done, it looks -- if I'm looking at the numbers right, like P&E additions were up marginally year-on-year, even excluding impact from the hurricane spend.
Okay. On the OCF margins, I think you'll see us come back to where we were at normally. I would not expect huge amount of margin expansion because of our rebuild. But we will get back to where we are. This is a very efficient market and our management team on the ground has been running the business very efficiently. It has one of our best OpEx to revenue profiles. So -- and we'll get back to that, and then you can see both in the actual growth of the OCF and the margins both recovering really well.
On the capital intensity, I think the rebuild capital cost went up just ever so slightly from what we originally thought we would spend. But it has been spent very efficiently. And when you look at the non-rebuild capital expenditure, it's also gone up, but like we discussed earlier in the call, the net adds have grown. The gross adds are growing. So there are some additional CP purchases and some investments in our customer experience as well. But we would go back to our normal CapEx profile when the rebuild is done, and we get out of this hump.
We'll take our next question from Mathieu Robilliard with Barclays.
Yes. I have two questions, please. First, in Chile, so you continue to do extremely well on Chile with good revenue and OCF growth. I note in the meantime that some of your competitors continue to invest in their fixed networks. And I was wondering if you're seeing at this stage any impact from that. And if not, when you look ahead, do you feel you have enough differentiation in terms of your offers and the quality of your network to continue to grow nicely?
I think we feel really good about our Chilean operations, our local management team, the product development cycles that we have going in there. It's a good story, and it'll continue. It'll continue for a number of reasons. One, this is not the first time we have overbuild this. If you recall, 4, 5 years ago, there was one of our competitor that really over builded this in Santiago.
We've rode through most of those, and it's not because of anything other than the fact that we run really good operations there, very high-quality network and great products, and we keep winning every day with those -- with that combination. And if you look at the latest group of overbuilders of fixed line fiber-to-the-home guys, at every turn, we have been one step ahead of them. And so we've not seen the impact from them. And I don't suspect that, that will change.
In addition to that, we are also investing in new builds. And so we are growing our network. And where we do grow our network, we've been winning more than our fair share. So you combine all that, great product, great network, investments in new construction, we see this run rate in Chile to be very strong.
If you can touch just briefly on Panama where it seems to remain quite a competitive market, if you could give maybe a little bit of color of how terms have developed in Q2 and what you're seeing for the rest of the year.
On Panama, it's a great business that we have there. On the fixed side, we had seen some positive signs there. And on the mobile side that's been a challenge. As you saw in our reporting, and it's mostly on the low end on the prepaid side. But Betzalel and Inge as well as our local management team have been really focused on our proposition, on the attach rate of our mobile services or fixed service as well as moving our customers more to LTE and more to postpaid. And so you'll see that this is a journey that we started on and we're going to see some positive shoots from that in the future.
We'll take our next question from Jason Bazinet with Citi.
I just had a quick question. As you guys sort of balance investments in the network to help your capabilities against sort of generating free cash flow, how important is actually generating positive free cash flow to the management team? I think you guided towards a slight burn this year. And you had a burn last year, but is that sort of top of mind? Or would you be comfortable sort of continuing to invest to sort of set the stage for better growth in the future, even if it meant burning cash as we move through '19?
Free cash flow is very important to us, and it's something that Chris and I and my management team talk about. We spent a fair amount educating our team, our whole management team to the lowest levels why free cash flow is important to this business. And just like any other management team, we also make a lot of capital allocation decisions. And some of the capital allocation decisions are towards improving our network, the customer experience, potential M&A, all sorts of different things. And Chris, myself, and Mike Fries who is our Chairman on the board and as well as our other board members, we spend a fair amount of time thinking about that and you can trust that we are -- our capital allocation decision-making process is very, very sound. But free cash flow is very critical to us and it's a key measure internally on our success.
We'll take our next question from Matthew Harrigan with Buckingham Research.
You have a quad-play in almost all your markets, I guess, maybe sans Puerto Rico. But how you compare the opportunity in Latin America to Europe, given the income levels in your market and the maturity of the technology road map? And then secondly, on the streaming side and moving away from the set-top boxes and getting to build an access on lower income demographic and higher churn demographic. I think that's something you talked about at least tangentially when you talked about some of your vision for the company when Balan came on. But has there been any movement in that process in terms of maybe layering up or enabling another level of growth?
Let me answer -- you have 2 questions there. The first question on the quad-play. We see tremendous opportunity in that. And the reasons being, one, on the mobile side, this is still hugely -- largely a prepaid market. And the way you move prepaid to postpaid is really you attach it against the other subscription packages that they have namely our fixed package.
And so Inge and Betzalel are starting to measure a lot of their success on postpaid based on the attach rate, and we think that there's a huge opportunity there. We truly believe in the converge story of people consuming data both on fixed and mobile seamlessly. And this is one we can really work really hard to exploit.
On the streaming front, we have streaming product in all the markets that we operate in. The real question that we've been looking at is how do you differentiate between the back book and the front book, the base and new acquisitions. I think you'll see just thinking a lot about products on new acquisition that are: one, more suitable to the demographics that we are trying to target or expand to; and secondly, it's something that is lower in capital intensity, which are -- which is nothing new, but not so easy to execute if you want to try to balance against spin down effects, what would happen to the existing base, et cetera, but this is something that our product team is working really hard at.
[Operator Instructions] We'll take our next question from Amy Yong with Macquarie.
Two questions. I guess, first on Puerto Rico. Just on guidance, given how quickly the recovery process is going, how quickly do you think you can ramp back up to that $40 million monthly OCF run rate? And then very quickly on Cabletica, I think we've all seen kind of the deal and the transaction, but can you frame the revenue and OCF opportunity for either the back half or going forward?
Well, on Puerto Rico, did you say $40 million? I think we meant $14 million OCF run rate, monthly run rate by the end of the year. And like I said earlier in the call, regarding to it, the fact that we're going to hit that. And probably, not say more than that other than we are on target to get to that OCF monthly run rate. We are quite bullish on Puerto Rico.
On Cabletica, that deal closes, we think in at least another 45 days or so possibly that's about as soon as it's going to be. And it's not going to be a meaningful impact to OCF profile for the rest of the year. But it's a business that we're really bullish on. We see huge opportunities in Costa Rica. We think the consolidation of that marketplace is not over yet. And so we feel really good. But we don't own that business yet even though I'd say we have been looking very hard at it, our product teams, our operation teams have already been diving -- digging into things.
And since we take ownership, we're going to work very closely with our partners there on realizing upside value. And our partner there has been really great to work with. The deal is not closed, they have been very cooperative, and very helpful, and we can clearly see it's going to be a great partnership going forward.
And we'll take our next question from Kevin Roe with Roe Equity Research.
A couple of questions. Earlier in the call you mentioned wireless pricing power in Jamaica and specifically, Digicel raising prices this past week in both prepay and postpay. Can you call out any other markets in the C&W footprint where you're seeing wireless pricing power? And on the -- second question is BTC-related, the new management team, if you could give us an update on how they're doing, and if there's more visibility or how close we are to stability in that market.
Okay. Let me answer the second question first, and then I'll ask Inge to think about the first one on pricing power in some of the other islands on mobile. On the BTC management front, we made a big change last year, late last year, where we changed out the management and we brought in a team that's really focused on a cost structure there. And this, I think, done a really good job on it, and we've seen the improvements and the expansion and our margins at the bottom line. It did not solve our top line revenue challenge there and so we've now come to the second phase of what we want to do with BTC, and we've made -- this is by the way, a natural progression. So the management team that we moved there had a mission, and they've accomplished their mission, and now we are moving them to another part of our business. And then we're bringing another team in there with a different mission, which is now the top line growth mission. And it's a gentleman that would report to Inge Smidts, and our Head of Cable & Wireless, his name is Gary Sinclair, and Gary has a proven track record of creating value in the top line. And so Gary is coming in into Bahamas, and he is going to take over from Dexter, and now focus on the top line. So we feel good about it, but it's still too early for us to say too much about it, but check back in 2 quarters. Oh, Inge, sorry. Inge, you want to talk about the other islands?
Yes, so on mobile pricing, we've been, let's say, very successfully taking pricing in the past and we will continue to do so. And if you look at our markets today, we've been taking pricing in mobile in the Bahamas, in Jamaica, in Barbados on very specific plans. And that is something that today is working really well for us. And we believe that given that we will really also look into the right propositions towards the right consumers, we will continue this way forward in the future in the same way.
And this does conclude our question-and-answer session. I'll turn the call back over to Balan Nair.
Well, thank you, operator. And thanks, everybody, for taking the time to join us on this call. Just to summarize, we feel good about the business, second quarter, I think operationally, we feel really good about it. And the things that we put on our strategic plan, we're nailing it. My management team has been doing a really good job, couldn't be more proud of the folks in Puerto Rico, in Chile, in Cable & Wireless, they're all executing the plans that we laid out when we came together as a management team in January. So it's all good, and we'll talk to you guys again next quarter.
Ladies and gentlemen, this concludes Liberty Latin America's Second Quarter 2018 Investor Call. As a reminder, a replay of the call will be available in the Investor Relations section of Liberty Latin America's website at www.lla.com. There, you can also find a copy of today's presentation material.