The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company (BTC) is demanding a 50 per cent cut to the time its new Cable Bahamas-managed mobile rival is allowed to use its network, arguing that 36 months is “too lenient”.

BTC, in response to the Utilities Regulation and Competition’s (URCA) ‘roaming’ intentions, argued that the regulator had provided no evidence to justify its proposal, suggesting that the second mobile provider be given just 18 months.

URCA is proposing to allow the Cable Bahamas-managed NewCo to deliver services via its rival’s infrastructure for a three-year period until its own network is built out.

The regulator, in its original consultation paper, said such an arrangement would deliver “substantial benefits” to consumers, as Bahamians and tourists would be able to enjoy the fruits of choice and competition wherever they are in this nation.

‘NewCo’, in which Cable Bahamas will have a 48.25 per cent equity stake, is to build-out its own network in phases, with a series of timelines set as part of its licence conditions.

However, it will be unable to cover the whole Bahamas for the first 36 months of its existence, so URCA is proposing to impose a three-year obligation on BTC to allow its competitor to deliver services via its network. This ensures that all geographical areas in the Bahamas benefit from the arrival of competition simultaneously.

BTC, though, argued that the 36-month duration would eliminate any “incentive” for Cable Bahamas and NewCo to roll-out their nationwide network as rapidly as possible.

It argued that its BISX-listed rival would simply develop its infrastructure to serve the major population centres, such as New Providence, Freeport and Abaco, while ‘piggybacking’ on BTC’s network in less profitable areas.

“Without knowing the specific details of the finalised network rollout obligations to be included in NewCo’s ISL, BTC considers that URCA’s proposed 36-month timeframe for the proposed roll out obligation is too lenient,” BTC argued.

“BTC believes that NewCo should be in a position to provide coverage to a large percentage of the population of the Bahamas within 18 months after its licence is finalised and granted.

“That would include a six month pre-commercial launch network build out period, and a further 12-month period to continue to rollout its network coverage to less populated areas.”

BTC continued: “At that point, NewCo’s network should cover the vast majority of the population of the Bahamas (likely close to 95 per cent) and, consequently, the national roaming obligation could be eliminated.

“Extending the obligation to 36 months would simply allow NewCo to limit its network rollout coverage to high population density, lower build-out cost areas, while continuing to benefit from BTC’s network coverage for the lowest density, highest build-out cost areas of the country.

“This would only serve to reduce NewCo’s incentive to complete its network roll-out in a timely and expeditious manner. Moreover, URCA has not demonstrated that NewCo requires near 100 per cent coverage to provide an effective competitive alternative in the mobile market. Accordingly, BTC considers that the timeframe for the proposed national roaming obligation should be limited to no more than 18 months from the date of issuance of NewCo’s licence.”

Cable Bahamas’ own response to the URCA consultation reveals that the Bahamas’ second mobile operator, NewCo, was incorporated on February 25, 2016, under the Companies Act.

However, it has yet to start operating. Tribune Business understands that much of the work required from Cable Bahamas, URCA, the Government’s Cellular Liberalisation Taskforce and their various advisers has been completed, including the structure of the entity that will hold the 51.25 per cent NewCo stake on behalf of other Bahamian investors.

The key to NewCo’s operational start, Tribune Business sources have suggested, now lies with the Christie Cabinet, which has yet to formally approve the second licence’s award despite Cable Bahamas winning the spectrum auction and being selected as the preferred bidder.

Cable Bahamas, in its response to URCA’s ‘BTC roaming’ consultation, said it would be responsible for providing technical, marketing and other services to NewCo, and would have Board and management control.

And, in sharp contrast to BTC, its BISX-listed rival argued that the 36-month period should run from the date it begins commercial operations - not the date of its licence issuance.

“Cable Bahamas welcomes URCA’s proposal that BTC will be required to provide national roaming services from the date that the second licensee begins commercial operations,” Cable Bahamas said.

“In addition, Cable Bahamas is concerned that the proposed national roaming period begins to run 36 months from the date of the issuance of the second license.

“Cable Bahamas respectfully suggests that the national roaming period should commence 36 months from the date that second licensee begins commercial operations, and BTC has provided roaming services in all the specified areas and locations requested by the second licensee or such other longer period as determined by URCA.”

Cable Bahamas argued that BTC should “provide national roaming on non-discriminatory terms”, and that it “not be able to deny national roaming services in any specified area or location in the Bahamas if it provides international roaming services in the specified area or location”.