The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s draft communications sector policy makes no mention of extending the Bahamas Telecommunications Company’s (BTC) cellular monopoly beyond its current April 2014 expiration, and instead calls for competition to come “as expeditiously as possible”.

The document, released yesterday, seemingly contradicts Prime Minister Perry Christie’s recent musings about offering BTC an extension to that exclusivity in return for its 51 per cent shareholder, Cable & Wireless Communications (CWC), returning majority control to the Government.

Rather than back a continued monopoly, the policy document released by the Utilities Regulation and Competition Authority (URCA) slammed BTC’s exclusivity as “an impediment to the social and economic development of the Bahamas”.

In what amounts to a pro-competition, pro-consumer choice policy, the document describes the market entry of new cellular operators as “a key objective” for the Government.

And it pledges that the Government, in concert with URCA, will “take all necessary steps to introduce competition in the cellular services market in the Bahamas as expeditiously as possible following the expiry of BTC’s exclusivity period”.

Communications industry insiders had previously told Tribune Business that the revised 2013-2016 sector policy would provide a much better indication of the Government’s intentions regarding BTC’s cellular monopoly than the Prime Minister’s comments two weeks ago.

The draft sector policy statement raises more questions than it answers about Mr Christie’s ‘dangling of the exclusivity extension carrot’ in return for the Government regaining majority ownership at BTC.

Among the immediate questions are whether the Prime Minister was ‘floating’ mere speculation and a distraction, as opposed to a concrete negotiating strategy.

Another unanswered issue is if he was simply airing a hypothetical offer to convince the Bahamian people - especially his party’s supporters, and some members of his government - that the Government was making progress in talks with CWC, when the likely reality is little headway is being made.

Still, the policy document created in a joint effort by the Government and URCA strongly suggests the Christie administration is going in a different direction from endorsing monopolies.

It said: “The achievement of the objectives of the Government, [and] having regard to the analysis of electronic communications services currently delivered in the Bahamas, leads to the conclusion that the lack of competition in the cellular services market is an impediment to the social and economic development of the Bahamas.

“The lack of choice in the Bahamas reduces the incentives for BTC, currently the monopoly provider, to achieve the highest quality and best prices which would truly drive social and economic prosperity.

“The Government, therefore, sees cellular competition as a key objective for the electronic communications sector moving forward.”

BTC’s cellular monopoly expires on April 5, 2014, three years to the day it was privatised. The draft sector policy document acknowledged that up until that time, the Government was “prevented from taking steps to make premium spectrum (required for the provision of cellular services) available to any person other than BTC.

“The provisions also expressly prevent any entity other than BTC from offering cellular services in the Bahamas during the exclusivity period.”

Seemingly looking forward to April 6 next year, the policy document added: “The Government will, and intends that URCA also, immediately upon expiry of the prohibitions contained in the Communications Act, take all necessary steps to introduce competition in the cellular services market in the Bahamas as expeditiously as possible following the expiry of BTC’s exclusivity period.

“The Government further intends that URCA take steps to equip itself with the necessary regulatory tools, which would be required to effectively regulate a competitive cellular market in the best interests of the Bahamas, after the expiry of BTC’s exclusivity.”

With the bid process and award of a second cellular licence likely to take a year, and the winner’s network build-out taking another 12 months, competition in cellular is likely to arrive by 2016 at the earliest.

The former Ingraham administration extended the cellular monopoly from two to three years post-privatisation, which was widely seen as a move to induce CWC to pay a purchase price greater than $200 million.

The draft communications policy statement also indicates that competition could provide a much-needed boost to cellular/mobile phone penetration, noting the Bahamas was lagging behind rival Caribbean and international financial centre destinations.

“At the end of 2012, there were 85.62 mobile voice subscriptions for every 100 persons in the Bahamas,” the policy document said.

“This represents a decrease since 2009, when there were 102 mobile voice subscribers for every 100 persons in the Bahamas. This decrease was mostly due to a reduction of dormant accounts and more accurate information being reported.

“The Bahamas fairs well in comparison to global averages, but a closer look shows that the Bahamas is lagging behind most of its Caribbean counterparts and other offshore financial centres.”

Data from 2011 indicated the Bahamas’ then-83.8 cellular subscribers per 100 persons was ahead of penetration rates for Africa and Asia-Pacific, but lagging Europe’s 120.8 phones 100 inhabitants.

The Americas and Arab states were also ahead of this nation, standing at 105.4 and 96.9 subscribers per 100 persons, respectively.

The Bahamas was also lagging most Caribbean nations, where penetration rates greater than 100 are commonplace. Only Cuba and Puerto Rico were lower.

As for international financial centres, cellular penetration rates in some of the Bahamas’ major competitors - the likes of Hong Kong, Panama, Singapore and Luxembourg - were all well in excess of 100 subscribers per 100 inhabitants.

“The Government anticipates an improvement in the mobile voice penetration rate with increased area coverage and affordability, through the implementation of Universal Service, and the advent of competition in the mobile phone market,” the sector policy document says optimistically.