Cable Bahamas, a provider of broadband, cable TV and data, has exercised a US$4.2m option to acquire 100% of altnet Systems Resource Group.
SRG was the first telco to challenge the monopoly of state incumbent Bahamas Telecommunications Company, when the…
Cable Bahamas, a provider of broadband, cable TV and data, has exercised a US$4.2m option to acquire 100% of altnet Systems Resource Group.
SRG was the first telco to challenge the monopoly of state incumbent Bahamas Telecommunications Company, when the Bahamian Government granted the company the first and currently only licence to provide international and domestic voice services. Cable Bahamas was granted a communications licence, which allowed it to offer broadband, cable TV and data services, but not voice.
The acquisition of SRG will allow Cable Bahamas to compete directly with BTC in voice and data services.
Next month, the government is opening up the local telecoms sector to new operators, both foreign and domestic. The regulator, the Utilities Regulation and Competition Authority is changing the regulatory regime in the country to help with the process of liberalisation.
Cable Bahamas was one of the first shareholders of SRG along with founding partners, Scotiabank (Bahamas), and a number of high-net worth Bahamians and a local newspaper, The Tribune. SRG offered equity in return for investment to help it to build out its network in 2004.
Cable Bahamas had an option inserted which would allow it to buy out the company at a later date, which it initially tried to do in 2007.
However, this was blocked by the then Bahamian Government, as Cable Bahamas was part-owned by a foreign entity, Columbus Communications. Cable Bahamas exited the control of Columbus Communications in July 2009 and has now exercised its option to buy-out SRG.
The companies are awaiting approval from the URCA.
The deal will give the combined entity a triple-play bundle that will enable it to go head-to-head with telecoms incumbent BTC, which itself is currently undergoing privatisation and as reported previously in TelecomFinance, is expected to be sold to Cable & Wireless in the near future.
Anthony Butler, President of Cable Bahamas told TelecomFinance that the company had refinanced earlier in 2010 and was using the proceeds of that to exercise the option. He said no external financial advisors were involved, but declined to comment any further as the transaction was under review by the URCA and government.
