Despite a stronger than expected start to the new year, Liberty Latin America is battening down the hatches as it prepares to get hit by the COVID-19 storm.

Liberty Latin America, which spun off from parent Liberty Global two years ago, reported rebased revenue growth of 2% to $931 million in the first quarter as it added 60,000 new revenue generating units (RGUs) across its vast Caribbean, Central American and South American region. Broadband accounted for the lion's share of those gains, as the MSO racked up 49,400 new high-speed data subscribers.

But the outlook for the rest of the year doesn't look so sunny as the novel coronavirus continues to spread throughout the operator's territories, sickening and killing people, disrupting tourism, shutting down hotels and shuttering other businesses. As a result, Liberty Latin America is preparing for a financial hit by cutting its fixed operating costs and capital spending by $150 million and withdrawing its previous financial guidance for the year.

In an unusual letter to shareholders, Liberty Latin America President & CEO Balan Nair noted that the company also expects "our variable costs, such as COGS [cost of goods sold] and activity related costs and capex, will go down with reductions in revenue." In addition, he stressed that the company has "more than enough liquidity on our balance sheet to weather this difficult period."

Like its North American and European counterparts, Liberty Latin America has been dealing with an unprecedented surge in traffic over both its wireline and wireless networks since the coronavirus storm gathered full force two months ago. Speaking on the company's Q1 earnings call this morning, Nair said the provider has seen "double-digit percentage peak traffic increases in our mobile networks and roughly 40% increases in our fixed and subsea networks usage" since the beginning of March.

But Nair insisted that Liberty Latin America's networks are holding up under the much heavier strain so far, with the help of "many of our key vendors" and "partners like Netflix and Google."

"This is not our first rodeo on dealing with a crisis," he wrote. "Like I said before, we are running this like a hurricane just hit us. But unlike a hurricane, we have nothing to rebuild at the end of this."

Similar to its counterparts elsewhere in the world, Liberty Latin America has placed much greater emphasis on self-installations, created virtual retail stores and developed more flexible payment plans for its customers, among other things, to cope with the pandemic. Nair said these initiatives are already producing results.

"We have had some of our highest broadband daily sales in the last 4-5 weeks in Puerto Rico and Chile," he wrote. "Our non-voice call center traffic, including using WhatsApp, is now past 20%. Our self-installs are growing fast and our relationships with B2B customers are stronger as they see how we have responded to their needs in these troubled times."

Nair said Liberty Latin America remains on track to upgrade or expand its footprint to 500,000 homes throughout the region this year. In the first quarter, the cableco upgraded or built out its network to about 80,000 homes, including 40,000 in the Caribbean area and 30,000 in Chile and Costa Rica.

Liberty Latin America is also moving ahead with plans to consolidate its hold on the Puerto Rican market by acquiring AT&T's wireline and wireless operations there and in the US Virgin Islands. That nearly $2 billion deal is expected to close by June 30.

Nair said Liberty Latin America, which sold its operations in the Seychelles and unsuccessfully pursued a deal with Millicom earlier this year, remains in the hunt for more properties. But he didn't indicate that any new deals are in the works.

In morning trading on the NASDAQ Exchange, Liberty Latin America's share price slipped 2.6% to $9.74 each.

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— Alan Breznick, Cable/Video Practice Leader, Light Reading