Cable & Wireless Communications has signed a non-binding MoU with the Bahamas to buy a 51% stake in state-owned Bahamas Telecommunications Company (BTC).
In a statement, CWC said it plans to complete the transaction in the first quarter of 2011, after…
Cable & Wireless Communications has signed a non-binding MoU with the Bahamas to buy a 51% stake in state-owned Bahamas Telecommunications Company (BTC).
In a statement, CWC said it plans to complete the transaction in the first quarter of 2011, after completing due diligence, finalising contract terms and getting regulatory clearance.
Under this plan, CWC will get management control of the board, as well as the majority equity stake.
BTC is the only mobile operator in the Bahamas at present, and it also runs broadband and fixed line services.
The Bahamas government has been planning for some time to privatise BTC and open up the mobile operating market.
But CWC said in its statement that the liberalisation of the market would start “no sooner than three years” after the transaction was completed.
This seems to confirm local media reports from yesterday, which suggested that CWC was pushing the Bahamas government to extend BTC’s monopoly for three years.
This extension of the monopoly was allegedly in exchange for CWC not slashing the BTC workforce by 30%. There was no mention of job losses in the CWC statement today.
Speaking to TelecomFinance, CWC said that “details of the restructuring are still being worked out”.
Systems Resource Group (SRG), a fixed-line competitor with BTC in the Bahamas, criticised the proposal.
An SRG woman told TelecomFinance: “SRG is of the view that the long term price that will be paid by the Bahamian consumer and the Bahamas economy will far outweigh any perceived immediate value [of the BTC monopoly], if it exists at all.”
But CWC’s CEO, Tony Rice, said that it was “a great opportunity” for the company its operations in the Caribbean region, where it already has a strong presence.
He added: “In partnering with the government of the Commonwealth of the Bahamas we believe that we can deliver a world-class telecoms capability to the people and businesses of The Bahamas and deliver significant operational improvements to BTC.”
Separately, SRG has called on the Bahamas Utilities Regulation and Competition Authority to delay plans to open up the 700 MHz band of the spectrum. In its response to the regulator’s public consultation, published on Monday, SRG said that the decision to open up this band should be delayed until there was greater clarity on when BTC’s mobile monopoly would end.
