The Tribune

Cable Bahamas yesterday said the clock had started running on the aggressive roll-out timetable for the second mobile operator to launch services to 99 per cent of New Providence within three months, after the Government approved its licensing.

Prime Minister Perry Christie, in his 2016-2017 Budget communication, confirmed that his administration would inform the Utilities Regulation and Competition Authority (URCA), “if they haven’t already’, to license the new operator, NewCo.

That entity, for which Cable Bahamas will have Board and management control, will see the BISX-listed operator take a minority 48.25 per cent equity stake. The majority interest will belong to HoldingCo, an entity which - at least temporarily - is owned solely by the Government.

This arrangement means that the Government is in the position of holding substantial, competing equity interests in the Bahamas’ two mobile communications rivals - NewCo and the Bahamas Telecommunications Company (BTC).

While the Government holds 49 per cent of BTC, it will - for the moment - control the majority interest in the incumbent monopoly’s rival.

Mr Christie, though, emphasised the temporary nature of this arrangement yesterday. He emphasised that the Government’s ownership was intended to both facilitate NewCo’s launch, without further delay, and provide time for its advisers to solicit private, institutional investors to acquire shares in HoldingCo.

Tribune Business previously reported that HoldingCo was created with a perspective that went beyond NewCo, namely that it would act as a vehicle to pool Bahamian capital for future investment in infrastructure and other development opportunities.

The cellular liberalisation process had initially envisaged soliciting investors to buy into HoldingCo, via a private placement, before NewCo’s launch.

However, this proved unworkable, given that much of the information that investors required - such as the business plan and financial projections - were still being developed by Cable Bahamas.

The initial cellular/mobile liberalisation request for proposal (RFP) allowed the Government to take initial ownership in HoldingCo if the situation warranted, something it has now done.

“In order to facilitate the timely formation and licensing of NewCo, the Government has incorporated HoldingCo with itself as the sole and initial shareholder,” the Prime Minister said yesterday.

“Government’s shareholding in HoldingCo, however, is intended to be temporary in nature and a Caretaker Board will be appointed until such time as HoldingCo’s shares have been divested.”

Mr Christie said the Cellular Liberalisation Task Force and its advisers, PricewaterhouseCoopers (PwC), would now turn their attention to seeking out investors for HoldingCo.

“It is proposed that HoldingCo’s shares will be offered to institutional investors (local pension/mutual funds, co-operative credit unions) within the next few months,” he added.

“Such an offering will ensure that the equity ownership in HoldingCo is as widely distributed as possible so that there will be broad Bahamian ownership.”

Mr Christie said the Shareholders Agreement between NewCo and HoldingCo had been completed, and that a first Board meeting of the former will take place within the next few weeks. NewCo’s licensing for a 15-year period will occur within the next few weeks.

The only entity unlikely to be happy with developments is BTC, which stands to lose the last lucrative monopoly generating 75 per cent of its revenues.

Bahamian consumers, though, are likely to benefit from lower prices, more choice and better services as a result of competition and NewCo’s entrance.

Cable Bahamas, in a statement following the Budget announcement, said the timeline to NewCo’s launch of services started yesterday, with the Government mandating that it complete a nationwide roll-out of services within 24 months.

The timelines suggest that NewCo will be in position to launch in New Providence, and the majority of Grand Bahama, by end-August/early September 2016.

Anthony Butler, Cable Bahamas’ president, said: “This is an historic and pivotal day for the Bahamas, and we are proud to have been successful in this process.

“But it is the Bahamian people that are the real winners. Now, the hard work begins and our focus will be to fulfill our promise to the Bahamian community to provide the best mobile services and applications in the world.

“We understand the market and the expectations of Bahamians. The mobile service needs to be reliable, affordable and fully support applications that customers want to use, and that is what Bahamians can look forward to from us.”

Mr Christie said NewCo’s roll-out obligations would be secured via a performance bond that it has to lodge with URCA within 14 days of the licence award.

He added that the Government would also enter into a Deed of Undertaking,”if needed”, to facilitate an accelerated roll-out of NewCo’s network in the southern Bahamas, pointing out that no such commitments or conditions had been secured from Cable Bahamas when it came to its cable TV interests.