The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) ha “no problem” with opening up the Bahamian cellular market to competition provided it takes place in accordance with the timetable set out when it was privatised, Tribune Business was told yesterday.

Responding to Prime Minster Perry Christie’s remarks on contacts between the Government and regional cellular provider, Digicel, Marlon Johnson, BTC’s vice-president of brand and communications, said the newly-privatised carrier would “welcome” competition as beneficial to the wider Bahamian market.

Adding that BTC knew Digicel, or whoever won the second licence to provide mobile phone services, would represent “formidable competition”, Mr Johnson told Tribune Business that the carrier’s own $45 million cellular network upgrade was now 97 per cent complete.

While its current cellular monopoly lasts until 2014 at the earliest, Mr Johnson said: “BTC has always understood that the market will be ready for competition.

“We’ve understood and appreciated that the sector policy calls for the market to be liberalised and opened up to competition, and as long as that timeline is maintained we wouldn’t have an issue.”

BTC’s privatisation agreement, which saw Cable & Wireless Communications (CWC) acquire a majority 51 per cent stake for $206 million, extended the carrier’s cellular monopoly until April 6, 2014.

That date was three years away from when the privatisation deal was sealed, and is still 16 months off. Many felt at the time felt that the cellular exclusivity was extended from two to three years in a bid to induce CWC to pay more than $200 million.

But Mr Christie’s comments yesterday seemed to imply that the Government, upset with BTC’s poor cellular service (dropped calls etc), had been entertaining Digicel’s desire to enter the Bahamian market before 2014.

To effect that would require major changes to the communications sector policy and other aspects of the privatisation agreement. It was also odd that ,as the head of BTC’s 49 per cent minority shareholder, Mr Christie seemed willing to accede to a potential competitor’s requests.

Digicel, which is CWC’s main cellular competitor throughout the rest of the Caribbean, has been ‘chomping at the bit’ to enter the Bahamian market for the past decade, given that this nation represents its last major growth opportunity in the region.

It has been stymied, though, by the political desire to protect BTC’s value via the cellular monopoly, as this business segment accounts for two-thirds of the latter’s revenues. Hence why BTC wants to stick to the existing cellular liberalisation timetable, as its business readies for competition.

But, given that the Government appears to be making little progress in its efforts to wrest back majority control of BTC, with CWC sticking to its guns, it is possible that Mr Christie mentioned Digicel as a means of gaining leverage in those talks.

He might be dangling Digicel, and the prospect of it entering the Bahamian market before the current timeline, as a negotiating tool and to put pressure on CWC.

As it stands today, the Government can only start the auction process for a second cellular licence on April 6, 2014. Given that it would likely take about a year to decide the winner, and another year for that company to build-out its network, it is probable that Bahamians would only see the benefits of competition come 2016.

Among the leading contenders for that licence, apart from Digicel, is Cable Bahamas.

And Mr Johnson said yesterday: “We welcome competition. It’s good for the customer, good for the sector, it forces all the players to be more efficient, and once it’s done in a fair and equitable way, it’s good for the market. We’ll be ready for the challenge and opportunity that brings.

“Whether it’s Digicel or any other competitor coming into the market, they will be formidable, and we will ensure we have a good game.

“That underlines all the investment we’ve put into the network to improve it, to improve the customer care and service, so that when customers have a choice on the cellular side they will choose us.”

Mr Johnson said BTC’s cellular network upgrade and transition was “97 per cent complete”, although it did have a legacy voice mail platform it was aiming to “change out” by January 2013.

Adding that BTC understood the Prime Minister’s concerns on service quality, he added that the carrier was “very, very close to having that kind of superior service” Mr Christie was looking for.

Mr Johnson said BTC had frequently explained the difficulties in transitioning to a new cellular network while customers were using both it and the legacy system, adding that Bahamians should now be seeing improvements on both the voice and data side.

A further $2 million had been invested in expanding network capacity at key cellular sites, and Mr Johnson said BTC was prepared to build more as needed.