The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading critic of the Bahamas Telecommunications Company’s (BTC) privatisation has defended its controlling shareholder’s decision to further downsize the workforce, arguing: “What choice do they have?”

Franklyn Wilson, who headed the Government-appointed committee that negotiated the ‘2 per cent Foundation deal’, said the latest move to shrink BTC’s workforce did not mean Cable & Wireless Communications (CWC) was the wrong privatisation partner.

He told Tribune Business in a recent interview that given the imminent arrival of mobile competition, CWC and BTC’s management had no alternative but to further cut costs so they could compete on price with their first rival.

Mr Wilson blamed the Ingraham administration, rather than CWC, for the current situation at BTC, and hit out at the Free National Movement’s (FNM) current leadership for saying the party might have acted differently with hindsight.

“I would definitely say that would not be a logical scenario,” Mr Wilson replied, when asked whether BTC’s latest attempt to cut staff levels - this time by up to 150 persons - indicated CWC was the wrong partner for the company.

And he added: “The fact of the matter is that whoever runs BTC was likely to downsize. The competition is coming, we know it’s real, and this is 2015.

“That is what they need to do. From what I see the company has sought to be humane, has sought to be responsible and helpful and so forth, but what choice do they have?

“The new guy coming in has a cost advantage, not having to operate old equipment and repair old systems. BTC has its work cut out to hold on to market share.”

Some observers may feel Mr Wilson has performed a remarkable ‘u-turn’, given that he slammed the 2011 BTC privatisation deal with CWC as “horrendously bad” for the company, the country and the Bahamian people.

However, he sought to make a distinction between CWC and the former Ingraham administration’s decision to go through with the $206 million privatisation, indicating that the major target for his criticism was the latter.

“I don’t think it’s fair to say CWC is not necessarily the right company,” Mr Wilson told Tribune Business. “Some of the people in government then [the FNM] are saying that if they knew then what they know now, but I don’t think they need to say that.

“They made a terrible mistake of ignoring sound and proper advice to sell at a particular time. It was their bad decision that got where we are, not CWC’s. I don’t see any justification for trying to paint CWC with this brush. That’s the way it is.”

Members of the current Christie Cabinet, while in Opposition, slammed both the actual privatisation and selection of CWC as the purchaser of a majority 51 per cent stake in the company.

Following the Progressive Liberal Party’s (PLP) re-election to office in May 2012, the relationship between themselves and CWC/BTC was distinctly frosty and uncomfortable until Phil Bentley became the former’s chief executive on January 1, 2014.

One of Mr Bentley’s first acts was to cement the ‘2 per cent Foundation’ compromise that is likely to have been largely negotiated by his predecessor, Tony Rice.

This face-saving deal for both sides allowed Prime Minister Perry Christie to claim he had regained ‘majority ownership’ of BTC for the Bahamian people, while still leaving CWC as the largest shareholder, retaining Board and management control, and consolidating the company’s results and accounts.

The Government’s improved relationship with CWC, and BTC, is thus a function of both the ‘2 per cent Foundation’ deal and the decision to restore Leon Williams as the company’s chief executive - an appointment much-desired by the Christie administration.

These moves also coincided with Mr Bentley’s decision to ‘snuggle up’ as closely as possible to the Government to protect CWC’s BTC investment, the main goal being to influence the mobile liberalisation process.

Until CWC’s recent Columbus Communications purchase, this process posed a material threat to BTC, given that it generated 24 per cent of its parent’s business - but depended on its mobile monopoly for 75 per cent of its revenues.

Confirming a ‘swing’ to defend CWC, Mr Wilson asked: “What did they do wrong?”

Apart from the Foundation agreement and re-appointment of Mr Williams to replace a non-Bahamian as BTC’s chief executive, Mr Wilson also cited the $65 million investment to upgrade the carrier’s networks, and sponsorships of Junkanoo and Junkanoo Carnival, as evidence of CWC’s credentials.

“What else can they do? What are they doing wrong?” Mr Wilson added of CWC. “I can’t see why, on the basis of what has happened since the sale, we would somehow say they are not a fit and proper company for it.”

BTC workers have until the end of March to decide whether they will accept the voluntary separation packages that the company is offering.

The carrier currently has 779 workers, and achieving the headcount reduction targets will drop BTC staff levels to just above 600. Combined with the 500-600 persons who left BTC in the wake of privatisation, this means its workforce will have dropped by up to 750 persons - more than half - in four years.

Mr Williams said BTC has little choice but to downsize if it is to compete with the new mobile entrant, citing Digicel’s plan, for example, to operate with a full-time workforce of 300 - almost 500 less than his own company’s staffing levels.

The rush to downsize indicates that BTC’s new TV and Internet investments have yet to pay dividends in terms of reducing its mobile dependence, and that CWC is worried that it may repeat the experience of Jamaica, where it was ignominiously shunted into second place by Digicel.