The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government and Cable & Wireless Communications (CWC) still have not closed their ‘2 per cent’ deal over the Bahamas Telecommunications Company (BTC), despite making a “very, very valiant effort” to do so last week.

Franklyn Wilson, head of the Government-appointed negotiating committee, blamed both sides’ respective attorneys for the delay, disclosing to Tribune Business he thought the negotiations would have been completed three months ago.

He “categorically” denied, though, suggestions that CWC had gained a further extension to BTC’s cellular monopoly in return for agreeing to reinstate Leon Williams as the latter’s chief executive.

Multiple observers have suggested to this newspaper that, in return for agreeing to relinquish close to 2 per cent of its stake in BTC, and the return of Mr Williams, CWC must be obtaining significant concessions from the Government in return.

The greatest benefit would be an extension to BTC’s cellular monopoly, which expired on April 6, but Mr Wilson said: “The chief executive of CWC has said that is not true. I am affirming that is not true. Categorically, I say that’s the case.

“What Phil Bentley said was totally consistent with what I’m saying: Nothing fundamental about the deal has changed.”

The critical test will come when the Government-appointed committee, headed by former financial secretary Ruth Miller, launches the tender/Request for Proposal process for awarding a second cellular licence.

There has been no indication yet of when that date will be, although the Prime Minister said in his Budget address that it would take six months from launch to select the winning bidder, and another six months for that operator to build-out its network. Either way, cellular competition will not arrive before mid-2015 at earliest.

High-level sources close to BTC, though, have given Tribune Business more insight into the reasons behind Mr Williams’s return. They said CWC sees it as paving the way to a smoother relationship with the Christie administration, which has long been opposed to both it and the 2011 privatisation.

Suggesting that the Government has been giving CWC/BTC a hard time, one source said: “We have been having big-time hassles getting work permits and other things, and CWC supposed that if they put in a guy who was amenable to the Government, then a lot of these issues would go away.

“The key to this deal, why Leon is here, is that Phil Bentley [CWC chief executive] decided he needed to have an optimal relationship with the Government in the near term, and stop some of these hassles today from happening. The Government came in, disliked CWC, and it’s been tough slogging.”

Mr Williams is extremely close to the Christie administration, having been named to its four-person negotiating team for the talks with CWC that resulted in nearly 2 per cent of BTC’s shares being placed in trust via the BTC Foundation.

He is particularly close to PLP chairman, Bradley Roberts, and the irony of Mr Williams’s return is that he was previously publicly critical of both CWC and the BTC privatisation itself.

Another well-placed source said that with CWC having moved its head office to Coral Gables, it was now close enough to manage and staff BTC from Florida if matters soured under Mr Williams.

“It’s going to be an interesting couple of months. My guess is this will go south pretty quickly,” the source said.

During the press conference to announce Mr Williams’s re-hiring as BTC’s chief executive, Mr Bentley at times appeared both defensive and abrasive. Tribune Business’s source suggested this was an indication that the CWC chief executive (and BTC chairman) knew he was taking a risk.

“These guys are on the hook to perform,” the source said. “I think he [Mr Bentley] realises what a big gamble he’s taking, and it has to work.”

This is because BTC for the year to end-April 2014 was the second-largest contributor to CWC’s earnings before interest, taxation, depreciation and amortisation (EITDA). This, though, has been achieved on the back of its cellular monopoly, and failing to properly cope with competition when this arrives could have major negative implications for both BTC and CWC.

Another source suggested Mr Williams would likely suffer a ‘cultural shock’ when he takes control on July 1, as BTC had changed beyond all recognition since he left the company in 2010.

They pointed out that, in just over three years, BTC had been transformed from a politically-controlled company where the employees were paramount to a profit-driven, customer and marketing-led organisation.

“When it was a government company, profits didn’t matter,” the source said. “It was all about managing the politics, and that the right people got this and that. Leon excelled in that environment; he played it pretty well.

“But in a multinational company environment, you’re only as good as you’re last quarter. Leon has not worked in that environment in his whole entire life. It’s such a sea change from where we were three years ago. It’s going to be a little bit of a cultural shock to him.”

Mr Wilson, meanwhile, said CWC and the Government tried to close the ‘2 per cent’ deal involving BTC last week during Mr Bentley’s visit to the Bahamas, but without success.

He implied that this was due to the negotiating tactics employed by the high-powered attorneys on both sides, telling Tribune Business: “A very, very valiant effort was made to do it while the chief executive was here on his visit. Lawyers from both sides worked very hard.

“It’s not a simple matter. We all thought it would be done by the end of March. Both sides have committed outstanding lawyers, and that’s part of the complication.”

Asked whether the Government’s deal with CWC would be tabled in Parliament once completed for the public to scrutinise, Mr Wilson said: “I can’t imagine that it would not be, just as I can’t imagine the Parliamentary committee to call for persons and papers [and scrutinise the privatisation] not happening either.”

The Sunshine Holdings chairman said the privatisation deal agreed by the Ingraham administration had given its successor no room for manoevere over the three-year cellular monopoly, as the Government would have been exposed to multi-million dollar penalties had it even formed a committee or developed the process for awarding a second cellular licence before April 6, 2014.

“We debated that in our group,” Mr Wilson said. “We got legal advice on that, because clearly if we had any flexibility there, it would have given us more negotiating leverage. We didn’t have that because the language was so tight; we could not do anything.”

He also hit out at Loretta Butler-Turner, the Free National Movement (FNM) leader, for suggesting she had revealed Mr Williams’s return six weeks before it actually happened.

“She has super natural capabilities to know what the chief executive of a global company is going to do six weeks before he does it,” Mr Wilson joked. “She’s laying claim to some very special powers. A colleague in the office here has said to ask her: ‘What number’s coming tomorrow?’”

He then slammed Mrs Butler-Turner and FNM leader, Dr Hubert Minnis, for both having been part of the Ingraham Cabinet that approved the BTC privatisation. He described them as “out to lunch”, having attended Cabinet meetings on the deal and having “no clue” as to what was happening.