The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ new mobile operator needs help from regulators and its main rival to maintain what its top executive described as a ‘double quick’ roll-out timeframe.

Damian Blackburn, Aliv’s chief executive, told Tribune Business that the pace of its network infrastructure build-out was “no mean feat”, especially given the interruption created by Hurricane Matthew.

He added that the start-up operator and its immediate parent, NewCo 2015, had accomplished in five months what it normally took mobile companies nine months to a year to complete - placing it on a record roll-out pace.

However, Mr Blackburn said Aliv now required assistance from both the Bahamas Telecommunications Company (BTC), its main competitor, and the Utilities Regulation & Competition Authority (URCA) to maintain this frenetic schedule.

Aliv has to-date been able to rely on the fibre optic infrastructure of its controlling shareholder, BISX-listed Cable Bahamas, as the ‘building block’ foundation for its own network.

However, having launched in Eleuthera this weekend, following its ‘going live’ with commercial services in New Providence, Grand Bahama and Abaco, Aliv is now targeting the islands of Andros, Bimini and Exuma in the New Year.

None of these locations, unlike the previous four, possess an extensive Cable Bahamas fibre optic infrastructure, with Mr Blackburn revealing that Aliv’s roll-out here will depend on gaining access to BTC’s sub-sea cable.

Acknowledging that there were now several factors “not in our direct control”, Mr Blackburn said the new operator was also working with BTC and URCA to make number portability a reality.

While this is already available to fixed-line (landline) customers of BTC and Cable Bahamas’ REVoice services, it has yet to be introduced in the newly-liberalised mobile market.

Number portability is vital to facilitating competition because it allows customers to keep their existing number when switching providers, thus removing a potential liberalisation barrier.

Mr Blackburn said number portability was essential for Aliv to make inroads into the corporate market, and expressed hope it would become a reality for thousands of Bahamian subscribers early in the New Year.

“The next ones are Exuma, Andros and Bimini,” he told Tribune Business of Aliv’s next island launches. “We’ll be looking at each of them early in the New Year.

“We have a number of hurdles not in our direct control to solve. We have to obtain subsea fibre access from BTC.”

Mr Blackburn added that Aliv would also be “broadening into the corporate market once number portability is available to us, which we expect will be in early 2017”.

He said: “It’s [number portability] important because people value their numbers, so we’re working closely with the regulator and BTC to make that happen as soon as possible”.

Mr Blackburn said that while number portability was “not vital to our success”, it was important to the Bahamian mobile communications market’s evolution, and especially corporate customers.

It will now be particularly interesting to see how much co-operation Aliv gets to fulfill its roll-out objectives, especially from BTC.

URCA has already mandated that BTC allow Aliv to lease and utilise portions of its network infrastructure, until the latter completes construction of its own, so that competition can be brought more rapidly to Bahamians wherever they are living in the Bahamas.

However, communications industry experience worldwide has shown that incumbent operators, such as BTC, have no incentive to let rivals in to steal their customers, and typically make life as difficult as possible for them.

Mr Blackburn, meanwhile, declined to comment on Aliv/NEWCo’s financing plans, which Tribune Business understands will require them to make a $40-$60 million ‘call’ on investors and the Bahamian capital markets in either the 2017 first or second quarters.

“We have plans around our financing,” he told this newspaper, “but I don’t think it’s appropriate to discuss them yet.

“We have the funding to do what we need to do. Like any sensible company, we keep an eye on what we need to do. We don’t have a financial offering planned. We have enough money from the shareholders to do what we need to do in the first phase.”

Apart from the $130 million provided by Cable Bahamas and the Government (the latter as 100 per cent temporary owner of HoldingCo, owner of 51.75 per cent of NewCo’s equity), Aliv also received vendor financing from its network equipment supplier, Huawei.

Tribune Business understands that any Aliv capital raising will be co-ordinated with the Government’s efforts to exit HoldingCo via a sale to Bahamian institutional investors, so the two do not end up competing for scarce financing.

“We’re on track in terms of our targets and expectations,” Mr Blackburn said of Aliv’s operational performance. “Sales are going well, and we’ve got thousands of subscribers on board very quickly.

“We believe that where everything is in our direct control, we’re hitting what we need to do and what we promised to do, even though there’s been a hurricane. Top of my list has been to get as many customers on board as possible. That’s what I’ve been running around doing.”

Declining to give figures, Mr Blackburn said Aliv’s network roll-out pace to-date had been “a record”. He credited this to Cable Bahamas’ existing network and preparatory work, which had involved acquiring and identifying cell tower sites, and “really made a big difference”.

“It would typically take nine months to a year to get where we’ve got to,” Mr Blackburn told Tribune Business. “We’ve done it in five months, that plus a hurricane, which is no mean feat.

“We’ll now obviously be broadening further our commercial offering, keep on refreshing that, bring new things to consumers and innovative price points as we go.”

Cable Bahamas last week said Aliv expects “revenues to increase rapidly, resulting in a significant gain in market share by the end of 2017”.

It touted the company’s various achievements, including the 160-plus jobs created by the new mobile operator, most of which are Bahamian.

Aliv was also said to have 83 sites across New Providence and Grand Bahama,and more than 200 roaming agreements through over 500 international operators.