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Mobile contenders wish auction start occurred 'yesterday'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas-based contenders for the nation’s second cellular licence wish the bidding process had begun “yesterday”, adding that they will be “quicker on the draw” and could launch services before 2016.

Edison Sumner, Limitless Mobile (Bahamas) chief executive, told Tribune Business that local providers held several natural advantages over potential Caribbean and international contenders seeking to bid on the licence.

Apart from having ready-built infrastructure that could enable them to launch services to the market earlier, Mr Sumner said a Bahamian-owned operator would also ensure the economic benefits remained in this nation.

The head of the former IP Solutions International (IPSI) reaffirmed that, should the company be successful in acquiring the licence, it would offer shares to the Bahamian public via an initial public offering (IPO) at “the appropriate time”.

Meanwhile, Barry Williams, Cable Bahamas’ senior vice-president of finance, told Tribune Business that the BISX-listed provider believed it could capture more than the 30 per cent market share it has obtained in fixed-line voice services if it won the second cellular licence.

He, too, said that Cable Bahamas’ existing fibre optic platform put the company ‘ahead of the game” in terms of getting to market earlier than any successful foreign bidder that would have to build-out infrastructure from scratch.

Apart from Cable Bahamas and Limitless, other players to declare their hand and confirm they will bid on the second cellular licence, when it becomes available, are global mobile giant, Digicel, and Virgin Mobile. Another possible contender is Vodafone, which was part of a bid to acquire the Bahamas Telecommunications Company (BTC) back in 2011.

The cellular/mobile market is arguably the most lucrative segment of the Bahamian communications market, generating around $20 million per month, or $240-$260 million annually, for monopoly provider, BTC.

With this market accounting for two-thirds of BTC’s top-line, and BTC making up almost 25 per cent of controlling shareholder, Cable & Wireless Communications (CWC) business, some in the market had begun to suggest the Government was delaying liberalisation to benefit CWC and BTC for as long as possible.

However, this has effectively been refuted by both Prime Minister Perry Christie and Allyson Maynard-Gibson, who have stated the launch of the Request for Proposal (RFP) and bidding process is “imminent”.

“I wish it were actually finished with now,” Mr Sumner told Tribune Business, as both he and Mr Williams expressed a desire on their employer’s behalf for the auction process to get underway.

“Particularly in my case, we’re standing by, waiting anxiously to move to the next phase,” Mr Sumner added.

Yet he told this newspaper he was “more concerned about the process being done properly”, and it be “efficient and transparent” and the Government get it right.

The Limitless Mobile chief agreed, though, that Bahamas-based providers did hold some natural advantages.

“Any other foreign company interested in coming in, it will take them time to build their network properly to get into this market,” Mr Sumner said.

“It could be 2016 before they get this business off into the market. We’ve been preparing for this to happen. Those in the market already will be more quick to the draw in getting those services to the market.”

He added: “I’d also be quick to say that because of where we are in the development of the country, the development of the telecommunications sector in the country, it would only be prudent for any government to consider having a partnership with a local company to get this done.”

Giving ‘respect’ to the strength of regional players such as Digicel, Mr Sumner said Limitless’s approach was “slightly different” in that it would not repatriate revenues and profits from the cellular business outside the Bahamas.

“That’s why we made the determination that, at the appropriate time, we will make an offer to the Bahamian community to acquire shares in the company, so they can benefit from the upside and increase in business as a result,” he told Tribune Business.

Mr Williams, too, said he wished the auction/bid process could have started “yesterday”, describing the opportunity as “absolutely tremendous”.

“The mobile side of voice is certainly the largest component of the voice market,” he told Tribune Business.

“We’re probably just under 30 per cent of the fixed-line voice market. We think we could do better on the mobile side than fixed line. It’s much more a demand service, and the margins are a lot better. Without putting money on it, we certainly believe it’s a lot more than we’ve seen on the fixed-line side of things.”

Mr Williams agreed that Cable Bahamas’ existing network meant it was “ahead of the game”, and had a “good chance to move quickly because it was already on the ground”.

While Cable Bahamas is a ‘Triple Play’ provider, it is unable to get into all of BTC’s markets because of the existing cellular monopoly.

Yet BTC is able to enter all of its markets, and will do so in 2015, becoming the Bahamas’ first ‘quad play’ provider with the launch of Internet Protocol (IP) TV.

“Some things are already out of our control,” Mr Williams said. “We would certainly have preferred the RFP to be out by now, and we would at least know the details so we could start to put these things in order to go after it.”

Comments

asiseeit 10 years ago

"Yet he told this newspaper he was “more concerned about the process being done properly”, and it be “efficient and transparent” and the Government get it right." Jokes for days, the government is a failure and does not know the meaning of Efficient or Transparent and they have not gotten ANYTHING right for at least 40 years. The Government of The Bahamas is a FAILURE!

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