The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamas Telecommunications Company (BTC) has almost doubled the Government’s return on its 49 per cent minority stake in 12 months, its chief executive yesterday saying the company was forecast to pay the Christie administration a further $20 million in dividends this year.

Arguing that the Government was probably earning more than when it was BTC’s 100 per cent owner, Geoff Houston told the Rotary Club of Nassau Sunrise that the Government had received $8.8 million in dividends since its April 2011 privatisation.

Mr Houston said that while generating returns was “part of the equation”, the company was making a big push towards increased efficiency to ultimately pass on significant cost savings to its customers.

“We have been able to turn around the profitability of the business quite significantly,” he said.

“In 2010, BTC reported an annual net earning of $12.8 million. Since privatisation we have paid dividends to government of $8.8 million, with another $20 million coming this year, so you can say we have almost doubled the return for government in a 12 month period.” .

Mr Houston added: “This is not about solely driving up returns for shareholders; that’s obviously part of the equation.

“A big part of our drive is towards efficiency so as to pass on those savings to customers. We have been driving hard to reduce our prices over the last 12 to 18 moth to make the business more competitive. When we benchmark our mobile pricing around the region and the world, our prices here are probably close to double what they should be looking at other markets, particularly for voice. For data we are not so bad now.” 

Mr Houston said that year-over-year BTC’s operating costs had been reduced by about 15 per cent. “We are aiming for another 20 per cent over the next 12 months,” he added.

Mr Houston said BTC’s 51 per cent majority owner, Cable and Wireless Communications (CWC), had brought significant benefits to the company.

“If I look at the network we bought for the 4G network using our purchasing relationship with people like Ericsson, we probably bought that network 30-40 per cent cheaper than what BTC could have bought it for as a standalone business,” Mr Houston said.

“We have actually reduced our operating cost by about $15-$20 million by using the existing prices we have had with those same suppliers. That procurement power and that kind of know how is  how we have been able to reduce the cost here.”