ASTCA audit highlights Hawaiki cable financing and increased broadband subscriptions
Pago Pago, AMERICAN SAMOA — American Samoa TeleCommunications Authority’s financial audit for fiscal year 2019, provides financial highlights of the ASG semi-autonomous agency, such as the financing of landing of the Hawaiki submarine fiber optic cable in the territory in 2018
The Hawaiki cable and the money spent on this project is expected to be raised when lawmakers get down to reviewing the FY 2021 budget, which has yet to be transmitted by the Administration for Fono review and approval. Like other semi-autonomous agencies, ASTCA is also expected to be requested by lawmakers to provided its FY 2019 financial audit report, which was conducted by Oregon-based Aldrich CPAs + Advisors LLP.
Among the financial highlights, in the report, is that financing of ASTCA’s interest in Hawaiki cable was substantially changed in FY 2019. Using funds provided by the American Samoa Economic Development Authority (ASEDA), the report says ASTCA paid off the $15 million balance still owed to Hawaiki and, in a separate transaction, regained full ownership and control of the Hawaii branch spur and 200 Gbps IRU (indefeasible right of use).
“This regaining of full ownership and control was accomplished through the extinguishment of a leaseback interest in the spur and IRU that had been held by the ASG Employees Retirement Fund (ASGERF),” the report explained, noting that the extinguishment was facilitated by a payment of $18.7 million to ASGERF by ASEDA on ASTCA’s behalf.
Another financial highlight, according to the report is that subsequent to the close of the fiscal year, ASTCA entered into a Memorandum of Agreement (MOA) with ASEDA to repay ASEDA $32.6 million for the money it provided to facilitate $29.6 million of financing of Hawaiki spur and IRU as well as $3 million ASEDA provided ASTCA for other capital projects.
According to the auditors, full details of that MOA will be reported upon in the FY 2020 audit.
With the Hawaiki connection in place and combined with the upgrading of ASTCA’s IP core in 2018 and 2019, the report also says ASTCA began to provide superior broadband product in American Samoa. The number of broadband subscribers increased substantially and broadband revenues increased by 31% — $915,0000 — from the previous fiscal year.
In additional to the Hawaiki/IP core upgrade project, the report says that ASTCA pursued another major improvement in the past few years: development of an advance LTE mobile network — to replace the aging CMDA mobile network.
“The LTE project was partially completed in the last month of FY 2019 and will be fully completed during FY 2020,” according to the report, which also notes that ASTCA expects the LTE project to eventually provide the same kind of robust increase in revenues as was realized following the completion of the Hawaiki project.
Other financial highlights in the report:
• ASTCA refinanced its existing term loan with ASGERF — unrelated to the extinguished leaseback agreement — to increase its lending facility by $3 million while slightly shortening the payback period to 84 months. The additional financing was received in September 2019 and is being used for long-term capital improvement projects, not for operations.
• ASTCA noted a combined $1.99 million reduction in expenditures for personnel and operations and maintenance in 2019 compared to 2018. This reduction is due to the renegotiation of legacy contracts, settlement of contractual obligations with O3B Satellites, reduction in labor force, and improvement in performance efficiencies.