The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas Telecommunications Company (BTC) union leader last night urged the government “not to be tempted” by any Liberty Latin America offer to acquire its stake in the company.

Dino Rolle, the Bahamas Communications and Public Officers Union’s (BCPOU) president, told Tribune Business that he “strongly suspects” that the Liberty “investment proposal” presented to the prime minister last week was a “pitch” to purchase all or some of the government’s 49 percent BTC stake.

He revealed that the proposal’s submission was confirmed directly to him by Inge Smidts, chief executive of Cable & Wireless Communications (CWC), the Liberty affiliate that directly holds Board and management control at BTC.

While conceding that Ms Smidts was vague about the nature of this “investment proposal”, Mr Rolle then disclosed that she informed him Dr Hubert Minnis said he would “consider” Liberty’s offer if the regional communications giant agreed not to move BTC’s call centre to Guyana.

The BCPOU leader expressed outrage to Tribune Business that the Prime Minister was seemingly using BTC’s call centre, and the jobs bound up with it, as “a bargaining chip” given that CWC’s 2011 privatisation deal with the government agreed that the facility would remain in The Bahamas.

He added that he was “strongly and firmly” opposed to Liberty/CWC acquiring all or more of BTC on the basis that it had yet to deliver on many privatisation promises, and voiced fears that expatriate workers would increasingly be brought in to take Bahamian jobs if this were to occur.

“I was told that’s something they [Liberty/CWC] are interested in several weeks ago before I heard anything of the date of their meeting with the Government and extent of how they would travel here in great numbers,” Mr Rolle told Tribune Business.

“On the same day that they met with the government I met with Inge, CWC’s chief executive for the region, at Baha Mar’s SLS resort. She indicated immediately about an investment proposal they had pitched to the government earlier in the day.”

Mr Rolle said Ms Smidts spoke in general terms, and provided no details, but he “strongly suspects” this was an offer by Liberty/CWC to acquire all or some of the government’s 49 percent equity stake in BTC.

“She was ambiguous,” he added. “She spoke in broad terms about this investment proposal. She didn’t say what it was... But Inge Smidts did say he [Dr Minnis] would consider their proposal if they consider leaving the contact centre here.”

The Prime Minister, addressing Parliament yesterday on the controversy caused by Balan Nair, Liberty’s chief executive, in his criticisms of BTC workers productivity and attitude, confirmed that plans to move the call centre from The Bahamas to Guyana were discussed at last meeting.

“I informed them that the government would not tolerate the removal of the call centre from Nassau to Guyana because I found it very insulting,” Dr Minnis said. “I was very firm that we would not tolerate Bahamians losing jobs. I would not tolerate that.

“The Government was (also) very upset with information that we are receiving that senior officials within BTC are being replaced for a foreign entity. That is most concerning and there was some rumour that individuals were being cherry-picked and that is not done in the Bahamas.”

He declined, though, to go into further details about the meeting with Mr Nair and other Liberty executives, prompting Mr Rolle to warn the Government against any thought of selling its BTC equity interest to raise much-needed funds for the cash-strapped Public Treasury.

“I warn the Government not to be tempted with that,” he told Tribune Business. “It’s low-hanging fruit, but I think we can do better to consider what was proposed at the time of BTC’s sale, which was to sell shares to the Bahamian people.”

The Government’s equity stakes in BTC and Aliv, where it holds a 51.75 percent majority interest, represent two assets that would likely take the least time to dispose of in raising instant cash. The Minnis administration, though, has publicly said it will not dispose of its Aliv interest until the mobile operator reaches profitability, and that is likely still a year or two away.

The former Ingraham administration proposed selling down the Government’s BTC stake in tranches that the Bahamian capital markets can absorb, but there has been no indication of what the current incumbent plans to do.

While CWC paid $210m (later reduced to $206m) for a then-51 percent majority stake in 2011, the value of its shareholding will likely have significantly diminished since then due to Aliv’s arrival and the end to its mobile monopoly, potentially cutting its worth to somewhere between $100m to $150m.

That still represents a potentially-significant cash infusion for the Public Treasury, and Liberty’s proposal could have been designed to capitalise on the Government’s fiscal weakness. The CWC and BTC owner has already shown it is uncomfortable holding minority stakes with governments as partners, its conference calls having recently flagged up its issues in Trinidad.

Still, the term “investment proposal” has a variety of meanings, and Mr Nair’s letter to the Prime Minister yesterday referred to discussions about “investing in improving our networks across the region, and we will certainly look at The Bahamas as one of those markets to enhance and extend our network”.

Mr Rolle, while conceding that the Prime Minister’s comments on the “call centre” represented a slightly different take on what he was told by Ms Smidts, said he was “strongly and absolutely” opposed to Liberty/CWC increasing its BTC ownership.

“I stand firmly against that,” he told Tribune Business. “Liberty hasn’t proven itself in the current agreement. The same group of persons has yet to live up to their terms of the sales agreement.

“I was offended that the Prime Minister was negotiating over the call centre, which is not a chip according to the sales agreement. The contact centre was supposed to be a centre of excellence for the region and remain here in The Bahamas.

“It is a non-bargaining chip and should not be in the negotiations. I honestly could not see how the Prime Minister could use the contact centre as a bargaining tool.”

Mr Rolle added that the new “industrial agreement” between the BCPOU and BTC, which has been much touted in recent weeks, is only an “agreement in principle” that has not been signed off since talks ended on April 30. He added that the new deal is largely retroactive, since it will expire on April 1, 2020.