The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators are set to explore whether Cable Bahamas could launch its mobile services via the Bahamas Telecommunications Company’s (BTC) network as a temporary measure until its own nationwide infrastructure is built out.

The proposal, which BTC will likely resist strongly, is contained in the Utilities Regulation and Competition Authority’s (URCA) draft 2016 annual plan, which was released quietly on New Year’s Eve.

Its contents were largely lost amid all the attention that focused on the approval, with conditions, of Cable Bahamas’ basic pay-TV price increase, but the annual plan shows URCA is determined for Bahamians to enjoy mobile competition in the shortest possible time.

Apart from the possibility of Cable Bahamas’ initially offering services via ‘roaming’ on BTC’s mobile network, URCA also wants the latter to introduce “direct connectivity” to that infrastructure.

Currently, with BTC enjoying a monopoly, all calls to its mobile customers incur a ‘transit charge’ because they have to pass over its fixed-line network to connect with the mobile.

This could potentially inhibit competition via the increased cost imposed by the ‘transit charge’, and URCA is also planning to introduce a mobile ‘termination’ rate in the Bahamas for the first time once BTC’s monopoly expires.

However, it is the proposal for Cable Bahamas, as 49 per cent owner and operator of the ‘NewCo’ mobile company, to initially use BTC’s network that is likely to catch the eye of most observers.

URCA’s draft annual plan hinted that the tough network roll-out timetable imposed on Cable Bahamas as the successful bidder, coupled with the Bahamas’ multi-island nature, had influenced its suggestion.

“The new cellular mobile provider will be required to meet stringent roll out and other obligations, as set out in the RFP (Request for Proposal), which will be included in its licence,” URCA said.

“However, the Bahamas, as an archipelagic nation with parts of its population distributed on remote islands in small communities, may present particular challenges for the quick roll-out of services throughout the country.

“It is intended that the new provider will provide service throughout the Bahamas from its initial launch, despite not having yet built its own network infrastructure. URCA will therefore consult on the possibility for the new provider to achieve national coverage by using roaming on the incumbent’s network as an interim measure only prior, to achievement of the roll out requirements.”

Although Cable Bahamas was selected as the “highest scoring” applicant and preferred bidder, having offered $62.5 million to acquire the wireless spectrum that ‘NewCo’ will use for its services, the second mobile licence award is not a ‘done deal’ yet.

URCA’s draft annual plan confirmed that negotiations between Cable Bahamas and the Government had continued into the New Year, despite all sides having hoped to conclude talks by 2015 year-end.

Among the terms that must be agreed are Cable Bahamas’ relationship with “HoldingCo’, the entity that will control a majority 51 per cent equity stake in the ‘NewCo’ operator. Financial details and a shareholder’s agreement must be worked out between both parties, with the Government’s approval.

Sill, with mobile competition seemingly imminent, URCA’s draft annual plan made clear it is considering other amendments to BTC’s Reference Access and Interconnection Offer (RAIO) to facilitate mobile/cellular competition.

“Currently, all interconnection to BTC’s network is via points of interconnection on BTC’s fixed network,” URCA said.

“This means that a call from other networks to BTC’s cellular mobile network must pass via BTC’s fixed network, incurring a transit charge in addition to any applicable termination charge.

“URCA proposes with the introduction of cellular competition, to require that BTC introduce the option of direct connectivity to its cellular mobile network, with corresponding amendments to its RAIO.”

And, explaining why a mobile call termination rate will likely be introduced in the Bahamas for the first time, URCA said that domestic calls to mobile phones were currently charged to the person receiving the call - not the one making it.

This is another legacy of BTC’s long-standing monopoly, and URCA said: “As a result it has not been necessary to include a regulated cellular mobile termination rate for domestic calls in the BTC RAIO (an international rate is included).

“It is anticipated that with cellular mobile competition, calls between mobile numbers on separate networks will be charged to the party initiating the call (‘calling party pays’ or ‘CPP’), and therefore the costs of mobile termination will be charged to the originating operator. In such circumstances, a cellular mobile termination rate will be needed.”

URCA added that competition will also require short message services (SMS) to be included in BTC’s RAIO as an interconnection service, so that messages can pass between the two networks.