By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas Telecommunications Company’s (BTC) majority owner is “not anticipating” any extension to its existing monopoly, and is preparing to go head-to-head with a rival cellular competitor before end-2014.
Tony Rice, Cable & Wireless Communications (CWC) chief executive, told an analysts’ conference call that it was making good progress with BTC’s restructuring, and pledged: “We’ll be ready for competition whenever it comes.”
And, in a comment that may cause disbelief among the Government and some BTC customers, he described the Bahamian cellular market as having “higher service standards than the US”.
This indicates Mr Rice, and CWC, have a rosier - and completely different position - than the Government on the numerous dropped cellular calls, something that has been a recurrent theme of the Prime Minister’s ongoing complaints about BTC.
Mr Rice, who is also BTC’s chairman, made no specific reference to Prime Minister Perry Christie’s recent musings that CWC was seeking to ‘trade off’ its 51 per cent majority ownership for an extension of the cellular monopoly beyond the April 2014 expiry.
The CWC chief executive instead vaguely referred to “an ongoing dialogue” with the Government, its 49 per cent minority partner in BTC, over cellular market liberalisation and other communications industry issues. He gave no specifics.
Asked about the Bahamas’ cellular liberalisation plans by a London-based investment analyst, Mr Rice responded: “The answer is that the liberalisation can kick-off, the process can kick-off, from April 1, 2014, under the agreement that we had with the Government.
“We are anticipating that that will be the case, and we are getting on with structuring BTC in a way that it can be ready for competition.”
He added: “Obviously, the Government are our partner as well as our regulator, if you like, and a proponent of liberalisaton.
“So we’re getting on with the task of preparing for liberalisation, but we have an ongoing dialogue with them around the liberalisation process, the market and stuff like that.”
This does little to clarify previous musings by the Prime Minister, when he floated the idea that in return for CWC relinquishing majority 51 per cent ownership back to the Government, his administration would extend BTC’s cellular monopoly beyond its April 6, 2014, expiry.
It is still unclear whether this was mere speculation thrown out by Mr Christie, or a disclosure of CWC’s negotiating tactics. The recently-released draft Communications Sector Policy, too, made no mention of extending BTC’s cellular monopoly beyond April 2014.
That document, which backs Mr Rice’s comments, called for cellular competition to come “as expeditiously as possible”, adding that BTC’s monopoly was bad for the Bahamas’ economic and social development.
Meanwhile, Mr Rice touted CWC’s progress in revamping BTC’s culture and operations post-privatisation.
He especially talked up the arrival of BTC’s Long Term Evolution (LTE) technology, which will bring data speeds 10 times’ faster than the existing 4G network and place the Bahamas “at the leading edge of global communications technology”.
Mr Rice told London-based investment analysts on the conference call: “We’re in pretty good shape. That’s [imminent cellular competition] one of the reasons why we’re going to launch the LTE network later this year, and we’ve already started reducing mobile rates, so the service levels are very good.
“This is a market that has higher service standards than the US market, which is great, and improving. The product offering is getting better and better. We’ll be ready for competition as and when it comes.
“Our guess is towards the end of next year,” Mr Rice added. “[That’s] what we’re anticipating. But let’s wait and see what emerges from that process.
“Obviously, there has to be a licensing process. I don’t know who it will be, so we’ll have to wait and see, but we’ll be ready whenever that crystallises.”
BTC’s cellular monopoly has been vital to its financial performance, this market having accounted for two-thirds of its $340-$350 million annual revenues pre-privatisation.
However, Mr Rice’s prognosis that a second cellular operator will be active in the Bahamian communications market before the end of 2014 is good news for consumers.
They should benefit from the increased choice and competition, via reduced prices and better products and services.
The April 2014 monopoly expiry will allow the Government to start what is likely to be a competitive bid/auction process for a second cellular licence to operate in the Bahamas.
Many believe it will take a year to determine the winner, and another year for that operator to build out a network, meaning true competition would only arrive in 2016. But Mr Rice’s comments indicate CWC believes BTC will be facing a rival two years before that.
Two obvious contenders for that second cellular licence are Digicel, which has been chomping at the bit to enter the Bahamian communications market for more than a decade. This nation is the only Caribbean territory in which it does not operate.
Digicel’s main rivals are likely to include Cable Bahamas, the BISX-listed communications provider having made no secret of its equally long-held ambitions to bid for a cellular licence. This is the only market segment it does not have a presence in.
Mr Rice’s conference call, which discussed CWC’s results for the three months to end-June 2013, gave no financial data or figures on BTC’s performance.
The CWC chief executive said: “I think we’re doing a good job in the Bahamas. We’ve got a bit more to do there, turning around what was a government-owned business and entity.
“We’re continuing to work on service delivery in the Bahamas, and we’re looking forward to the launch of LTE there later in the year. That, plus the NGN network, will bring the Bahamas to the leading edge of global telecommunications technology.”
CWC added that BTC had “delivered solid progress in its financial
performance”, and would be among its first business units to launch the LTE technology.
However, some Bahamian consumers and CWC’s government detractors will likely paint a very different picture of BTC and its performance, especially on service quality and the number of dropped cellular calls.
BTC, though, has previously said the service quality issues have arisen from the explosion in mobile data demand facilitated by its 4G network. The carrier has invested multi-million dollar sums to build new cell sites to relieve congestion bottlenecks.
The Communications Sector policy document said the launch of mobile broadband services by BTC in 2012 “led to a substantial take-up of mobile broadband services within its first year of service, with the number of subscriptions being over 110,000 at the end of 2012, resulting in penetration of 31.27 subscriptions per 100 persons”.
Comments
John 10 years, 8 months ago
Geoff Houston and Tony Rice and Cable and wireless is hoodwinking and bankrolling the Bahamian public. Do you know BTC plans to again reduce the margin it pays to vendors for selling phone cards and Top Up? It will be paying these vendors one cent per phone card minute while BTC will be making 19 cents per phone card/Top Up minute. Ask Houston and Rice why and how they expect the Bahamian business people to subsidize the sale of its phone cards. Most intangible and consumer products see a 30-50% mark up at the retail level. BTC is giving its vendors 5%. And if you make a mistake while doing Top Up or by chance take a counterfeit note when selling, the loss is all yours. And they are telling us they are reducing the cost and improving the quality of the product.. But are they really reducing costs when they take profit from persons who sell their product? C&W is hogging every dollar it can from the Bahamian consumer and vendor by way of BTC and exporting these 'profits' out the country.
Puzzled 10 years, 8 months ago
By the way 49% of these profits go to the Bahamian Government and hopefully back to the people that elected the government.
If the vendors are to get 30-50% profit for standing beside road or ringing up the sale on a cask register, then the price to the consumer will have to go up and the whole privatisation process was to bring prices down! If the vendors can get 30-50% then why should BTC not get a similar mark up? After all it is their financial risk.
By the way have there been many comments by Digicel recently that would indicate that they are "chomping at the bit"? Not really, so the most likely competitor is Cable Bahamas and we all know their record recently.
SP 10 years, 8 months ago
Any body else notice that white Bahamians, Conchy-joes and smart ass white expats are not complaining about the worst communications service in the history of the Bahamas?
Not one peep from this group of know it all's no matter how lousy the white owned & operated BTC is.
Their silence is absolutely deafening.
These same people would have been having a field day with ton's of complaints daily and name calling surpassing Holy Heaven if a black Bahamian group had bought Batelco.
Farmer 10 years, 8 months ago
I am white conchy joe and despite further comments on your quite racist remarks I constantly complain at how the service at BTC is no better and even worse now that it has been privatized and many of my conchy joe family and friends say the same thing. So stop attacking the few conchy joes left in the Bahamas and take your complaints to BTC and the non conchy joe government that sold BTC in the first place. Thanks!
BahamaBoy 10 years, 8 months ago
I agree. Black people are increasingly becoming racist and vocal. Despicable!
UserOne 10 years, 8 months ago
Farmer, that is much too polite a response to such a hateful, racist rant.
concernedcitizen 10 years, 8 months ago
@SP we live in a independant black ruled country ,,the whites are less then 10% and run businesses and pay their national insurance for their workers unlike many prominent black company owners ,,i live on a family island and most of us perfer to do business or work for whites or winter residents,,i could see you blaming your lot in life if you were the minority ,but here your not ,and now there are more black wealthy business owners then whites ,,geez give that nonsense a rest ,,you don,t live in Alabama ,,
John 10 years, 8 months ago
@ PUZZLED..no one is asking for 30-50% markup and selling cards involves more than standing besides the road, which is not as easy as it seems, or just ringing up Top Up on a machine. First of all you must have the funds available to purchase the product, either your own or borrowed money. Then you must go through the process of getting the product from BTC or its wholesalers, which involves going to the bank since many do not take cash. When BTC was operating the company they gave their vendors 25% margins, 15% for the retailers and 10% for the wholesalers. This was then reduced to 20%. B>T>C made profits at these margins. Just prior to C&W taking over the margins were reduced to 15% then to 11% and now to 9%..to be split between the wholesaler and retailer. These people must pay overhead, including light bill, rent, national insurance, staff etc. Now you ask how could BTC make a profit if they paid these persons 30-50% to sell phone cards and top up. I ask you, How could any company survive when only 5 cents of every dollar is to cover its operating expenses. In fact you couldn't get a bank loan for a 5% interest rate in this country. But satisfy your couriusity even more: Go to any business operating in this country and ask them to name any product that they sell for a 5% mark up..not even cars...I challenge you! In fact lets make the argument more personal..Say you had a job that was paying you $500.00 a week. But you had to wear a suit every day, drive your car to work and to do the companies business, pay for your own gas and for the air condition in your office, in fact you also had to pay your secretary and for cleaning your office. So at the end of the week of the $500 you were paid, you were only left with $25.00 for your personal use. Would that job be worth your while? Well the plight of the card vendor is even worse than that. When they sell $500.00 worth of cards they are left with $25.00 to pay off their expenses with. Only after that they have what is left of the $25.00 for their personal use...it it worth it
concernedcitizen 10 years, 8 months ago
@john you really need to knock this nonsense off ,,under BTC the codes were flying out the back door and we the public were paying 40cents a minute for that and an overstaffed company ,,everyone knew of places where you could buy 20$of mins for 10$ and we the public paid ,,i know many legit businesses that are quite happy to sell top up ..I and most of the productive population don,t want to pay the highest rates in the free world so our prolific babie makers can sell phone cards ,many stolen,as a career ,, we need birth control not more unfeasible made up industries by goverment that the productive people are taxed to death for ,,,
B_I_D___ 10 years, 8 months ago
I guess in a round-a-bout way, BTC just unofficially confirmed that they are NOT making any deals with the government for that 1% that may include extending the monopoly. How much longer with PGC and the boys carry on the ruse that they are in negotiations. Wake up people, there will be no deals recapture majority share.
proudloudandfnm 10 years, 8 months ago
I negotiated a contract, took two phone conferences, and finished my day yesterday with no phone issues.
BTC was an excellent deal for us, we now get to collect, we don't manage, we don't pay out overtime to every employee whether they work or not anymore, we don't hire political cronies to sit and read newspapers, we just collect.
Now let's do the same for the rest of these money sucking corporations. How much lost at BEC over the years? Bahamasair? Why? Year in and year out, losses. Why? Get rid of them.
Maybe then we could get rid of some of these new taxes, er, sorry, fees this government is drowning us in.
concernedcitizen 10 years, 8 months ago
and the congregation said "AMEN" ,,,,,,,,,,,,
John 10 years, 8 months ago
There was one incident where phone cards and pin numbers were stolen from BTC in recent times. The person that activated the pins and cards was put before the courts and sentenced to 3 years imprisonment. Since she did not name the persons whom she activated the stolen cards and pins for, she was the only one that went to jail. When you saw phone cards and pins being sold on the streets below value, they were products that were stolen from vendors or items stolen when stores were broken into, not BTC's products. There has been no reduction in the pre paid phone card rates since C&W took over BTC and I challenge you to name 3 (Bahamians say tree) local companies that say they are happy or even satisfied with what they are making (or losing) selling top up or phone cards...and the truth will prevail!
concernedcitizen 10 years, 8 months ago
there are many promtions ,plans etc to get more minutes for your money...one stolen card scam in recent times ,there were alot at the old BTC,,,,how many under goverment ownership that were never prosecuted ...name a country w/ the gov as the primary employer that doesn,t go bankrupt ,, or a country w/ a birth rate and illegitamacy greater then GDP growth that doesn,t have rapidly rising crime ,poverety, and taxes despite trying to negate it w/ more public service jobs ,,,,,,you see things w/ emotion and fantasy feasible industries ,,i,m about reality ,,less public sevice jobs ,,more private growth and planned parenthood ,,its not going to happen and in 30 yrs we will be jamaica,, .haiti ,,,,,,,i,m a realist and a student of history ,,,,,,,,,,
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