The Tribune

ON THIS page today, a letter, signed only as “See the Danger”, questions not only the morality of selling Bahamas Telecommunications to a foreign company, but also the legality of such a sale.

Whoever the letter writer is, he/or she must either have an extraordinarily short memory or be suffering from amnesia.

It is true that BTC under its new owners is still having problems — customers still complain of “dropped calls”, although at times we get the impression that BTC’s “dropped call” is a good excuse to end an unpleasant conversation.

However, we wonder if BTC would have been further ahead if on purchase it had been allowed to build a telecommunications network without disgruntled politicians banging at its door to take over, and a few “bad apples” among the staff — all Bahamians, remember — not fully pulling their weight.

Despite this, BTC, with its foreign owner, has produced more revenue for the Bahamas Treasury as a minority shareholder than when it fully owned BTC and was fumbling around on its own with antiquated plant, more staff than needed, and inferior service. Of course, Bahamians were overcharged for the service.

BaTelCo, as it was then known, was blamed for crippling business and retarding economic growth. Those days were so bad that we don’t know how this letter writer could have forgotten them.

Even Leon Williams, now BTC’s head honcho in a new deal hammered out by the Christie government with Cable and Wireless, had major complaints in 2004 when he was BTC’s senior vice-president of operations and chief operating officer. In 2004, Mr Williams who incidentally was against the sale of BTC to foreigners, blamed much of the company’s problems on the “political directorate”. That was the very reason why when it came time in April 2012 to sell the inefficient company, former Prime Minister Hubert Ingraham made certain that Cable & Wireless held 51 per cent of the shares to eliminate political interference.

And in a talk given in 1997 to the Bahamas Chamber of Commerce on privatisation in the Bahamas, Dr Alvin Rabushka noted that the “most frequently voiced criticisms of all the public corporations were directed at BaTelCo”.

Dr Rabushka was a visiting political scientist and Senior Fellow at the Hoover Institute at Stanford University.

“Critics,” said Dr Rabushka, “charge BaTelCo with high cost, poor quality, deficient service, and serving too much as a welfare programme for its employees. No individual with whom I spoke uttered positive remarks.

“Indeed, members of the financial services sector uniformly expressed concern that the Bahamas risks losing business to other offshore financial centres unless BaTelCo service and price competitiveness improve dramatically.

“As of 1995,” he said, “the most recent financial statement for BaTelCo was for the year ended December 1993. The balance sheet shows $133.2m in net assets and liabilities. The next most revealing figure appears under ‘current assets’: $677.9m in accounts receivable and prepayments. This exceeds by $17m the sum of $50.5m in accounts payable and accrued liabilities…” And so he goes on.

As for the legality of the sale of BaTelCo, as it then was, former Prime Minister Ingraham was quite open with the Bahamian people. He said that if his government were returned in 1997, it intended to sell BaTelCo.

“I chose such an occasion,” said Mr Ingraham, “to ensure that the people of the Bahamas could take full account of our intention when they went to the polls.” Unlike, the PLP in the 2012 election, the Ingraham government delivered on its promise with the full support of the electorate.

BaTelCo was too powerful – it was a law unto itself and many of its top staff took pride in reminding the public of that fact.

“Batelco was the Regulator and provider,” said Mr Ingraham at the time. “We knew that this element of monopoly was not good for consumers or the entrepreneurs of The Bahamas; we eliminated it.”

A year after signing the agreement with Cable & Wireless, the Ingraham government was voted out of office. The PLP government, which was not against the sale of BaTelCo, but favoured a company by the name of BlueWater that had no track record — was intent on changing the Cable & Wireless agreement. It felt that government should be the majority shareholder — in the name of the people, of course.

With government holding 49 per cent of the shares of the new company, had it been re-elected the Ingraham government planned the following year to offer nine per cent of the shares to the Bahamian people. The Christie government, not wanting to lose control of the 49 per cent, but intent on getting more shares as it planned its take over, cancelled the public offer.

Although Cable & Wireless shares have been reduced, it is still the majority shareholder, if only by a fraction. However, the Christie government has made certain that not only is Leon Williams director of the board, but the majority of the board of directors are Bahamians.

And so, if “See the Danger” is upset by the performance of BTC, don’t assume that it is because it is foreign owned. Remember BTC operates with a Bahamian staff and a Bahamian board of directors.

And so if there is blame — look to your own. As Franklyn Wilson said in making the announcement: “Not only do we have majority economic control, but we now have majority Bahamians on board.”