By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Regulators will in early 2021 initiate studies to help the Government assess the "feasibility" of allowing a third operator to enter the Bahamian mobile communications market.
The Utilities Regulation and Competition Authority (URCA), in its just-released draft annual plan, said such research was required by the Electronic Communications Sector Policy to support the Government's decision on whether to permit further competition for the Bahamas Telecommunications Company (BTC) and Aliv.
"As set out in the draft electronic communications sector policy, the Government of The Bahamas will consider whether further liberalisation of the mobile telephone market should be undertaken in the form of a third mobile operator," URCA said.
"The policy requires that URCA provide advice and recommendations to the Government on this matter, including a feasibility and market analysis to support any recommendations made." The "feasibility assessment" is scheduled to begin in the 2021 first quarter and conclude by mid-year.
The electronic communications sector policy previously gave URCA a 2021 year-end deadline to supply its advice and recommendations on the third mobile operator issue, while pledging that the Government would take no decision on the matter before 2022 at earliest.
That timeline has likely been determined by the Government's plan to sell-off its 51.75 percent majority stake in Aliv via an initial public offering (IPO) currently scheduled to take place between the 2022-2023 and 2023-2024 fiscal years.
The Government is aiming to raise a combined $150m from the Aliv sale and disposal of its interest in a solar energy financing vehicle, and will not want to dilute the value of its majority stake - and potential returns for the Treasury - by allowing a third mobile entrant too soon.
The policy acknowledged that the Government will be some two to three years late in deciding whether to introduce more competition into the mobile market, as this decision should have been taken by October 2019 - some three years after Aliv ended BTC's 16-year mobile monopoly by becoming its first competitor.
“The Government will further consider the feasibility of additional and expanded entry in cellular mobile services,” the policy document says. “In the previous electronic communications sector policy, the Government promoted the introduction of competition in the mobile sector, a goal realised with the launch of services in 2016 by the second mobile operator.
“In the liberalisation process, the Government delayed the consideration of the third mobile operator for a period of no less than three years after the commercial launch of the second mobile operator - October 2019. The Government will review this issue, in conjunction with URCA, during the life of this electronic communications sector policy to determine an appropriate policy position moving forward.”
The policy document added that the Government will both determine whether the entrance of a third mobile competitor is warranted, “and the manner and form any such liberalisation should take”. A key concern has always been whether The Bahamas, with its 400,000-strong population and estimated 360,000-380,000 mobile subscribers, has the critical mass to support a third mobile operator.
Elsewhere, URCA said Bahamas Power & Light's (BPL) plans to "unbundle" its monopoly through the proposed power purchase agreement (PPA) with Shell North America "and/or a possible merger" meant it needed to forge ahead with developing competition guidelines for the energy sector in 2021.
"While it is noted that the electricity sector is currently comprised of monopolistic holdings, the Electricity Act 2015 as constructed does allow for the unbundling of the industry and inherent competition," URCA said.
"As at least one of the major public energy suppliers (BPL) in the country is actively considering a power purchase agreement and/or a possible merger, the electricity sector department deems it necessary to establish the guidelines on the application of the competition and merger control provisions set out in... the Electricity Act at the earliest possible opportunity.
"It is for this reason that the development of the competition guidelines has been include in the 2021 proposed schedule of works."
A lower priority, though, has been assigned to an efficiency audit of BPL to determine the quality of the state-owned utility's management and operations. "In recent years, BPL has been faced with problems across the full range of its generation, transmission, distribution and supply (GTDS) services, which have resulted in diminished quality of services, increased costs and overall value for money concerns," URCA said.
"In this regard, URCA proposes to conduct an efficiency study for BPL, and in doing so, to develop a tool or procedure that would facilitate similar audits of BPL and other licensees going forward."
The regulator added: "The primary objective of the efficiency study/audit would be to provide comprehensive and objective insights into how the utility operates, highlight any adverse performance consequences of its current approaches and practices, and to inform the 'efficiently incurred costs' analysis envisioned by the Electricity Act with regard to tariff reviews......
"It is proposed that the audit will examine practices and processes in the areas such as corporate governance, operations management, financial management, debt and asset management, human resources and, to the extent that they exist, related party transactions.
"The audit is expected to evaluate the extent to which there are opportunities for fundamental improvement in the business of the company to the benefit of all stakeholders."
Comments
nassau98@aol.com 3 years, 11 months ago
Yes, the goverment should allow a third mobile operator. Cellular phone services in this country is still way too high.
Sign in to comment
OpenID