The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Extending the Bahamas Telecommunications Company’s (BTC) cellular monopoly will “be harmful to the Bahamian economy and the Bahamian people”, a former Cabinet Minister warned yesterday.

Zhivargo Laing, who headed the BTC privatisation advisory committee, told Tribune Business that liberalisation of the Bahamian communications market - and all the benefits flowing from that - had been the “big prize” for the former Ingraham administration.

Reiterating that the sale of a majority 51 per cent stake in BTC had only been a ‘stepping stone’ to that much wider goal, Mr Laing said extending the company’s cellular monopoly would ‘shut out’ Bahamian entrepreneurs from a “lucrative market”.

Prime Minister Perry Christie last week mused that, in return for Cable & Wireless Communications (CWC) relinquishing majority control back to the Government, his administration would extend BTC’s cellular monopoly beyond its April 6, 2014, expiry.

It is unclear whether this was mere speculation thrown out by Mr Christie, or a set negotiating tactic, but Mr Laing yesterday warned the Prime Minister to consider the “very important trade-off” he outlined - achieving a political objective on the back of sacrificing the welfare of Bahamian consumers, business and the wider economy, at least in the short-term.

“I believe that delaying liberalisation of that sector is going to be harmful to the Bahamian economy and the Bahamian public,” Mr Laing told Tribune Business on BTC’s cellular/mobile exclusivity.

“Imagine the Bahamas with a closed monopoly in the food sector, a closed monopoly in the banking sector, a closed monopoly in the legal sector. We wouldn’t fathom it.

“Imagine those same sectors not open to Bahamian participation. We wouldn’t think of it in a 21st century Bahamas.”

Applying this thought train to the Bahamian cellular market, and the Government’s ramblings on extending BTC’s exclusivity period, Mr Laing said: “You would have a very lucrative business, communications and cellular services, where monopoly is the rule, and direct Bahamian participation is illegal.

“Why would we want to delay removing that environment from the Bahamian economy? To me, it’s just unthinkable in a 21st century Bahamas where we are trying to get the economy to its maximum and generate jobs, generate economic opportunities.”

Mr Laing reiterated that delaying cellular liberalisation would deprive Bahamian consumers and businesses of choice, and the better prices, services and technology that a competitive environment will deliver.

“The PM would have to take account of this trade-off, this very important trade-off, for what he is attempting to do,” Mr Laing added.

Tribune Business has repeatedly pointed this out, and that under the current timescale cellular competition might take two years to arrive in practice.

With the bid process and award of a second cellular licence likely to take a year, and the winner’s network build-out taking another 12 months, competition in cellular is likely to arrive by 2016 at the earliest.

The former Ingraham administration extended the cellular monopoly from two to three years post-privatisation, which was widely seen as a move to induce CWC to pay a purchase price greater than $200 million.

Meanwhile, communications industry sources, speaking on condition of anonymity, said the revised Sector Policy would be key to confirming the Government’s intentions on BTC’s cellular exclusivity.

That Sector Policy, which falls under the Prime Minister’s portfolio, was supposed to have been published in late 2012. That deadline was extended to April 5, 2013, but no further word has been given on when it will appear.

This means the Government is running between six-nine months late on publishing its 2013-2016 policy for a key industry, and speculation will doubtless be that the Government’s BTC negotiations are at least in part responsible for this.

Mr Laing yesterday also emphasised that privatising BTC was not the Government’s main goal, but rather a platform for achieving communications industry liberalisation.

“For us, the big prize in the process of privatising BTC was not the privatisation of BTC itself,” he told Tribune Business.

“Privatising BTC was necessary to get to the big prize, which was Bahamians being able to enter this closed, lucrative market, invest money and earn some returns.

“The big prize was liberalisation - for the country, for Bahamian consumers, for Bahamian businesspeople and the economy.

“And a company [BTC] that could compete, and help consumers, businesses and the economy of the Bahamas to flourish. That doesn’t happen in a monopolistic environment.”

Extending BTC’s cellular would prevent Bahamian entrepreneurs, seeking to establish their own niche businesses in that market, from doing so for several more years.

The only ones to benefit from this, Mr Laing said, would be BTC’s two shareholders - CWC and the Government.

And Mr Laing added: “BTC in its then-form was not able to thrive in a competitive environment, so we thought we needed a partner with experience of operating in a competitive environment that would be able to ensure, once the market opened up, that it could compete.”

Calling for the Government to focus on delivering the “best outcome” for the Bahamas and its people, Mr Laing said it had to choose between two situations.

He laid these out as “an environment in which there is competition for the hard-earned dollars of Bahamian telecommunications consumers, there opportunities for Bahamians to enter a lucrative market, and competition that presses for the best deals and services, versus a monopolised, closed sector”.

“The answer to that question for me is very clear,” Mr Laing added. “Should the closed, monopolised market persist for longer, or should it be removed as quickly as possible. I think people will say it should be removed as quickly as possible.”