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Call For Clarity Over Cellphone Licence

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K Peter Turnquest

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

OPPOSITION Deputy Leader Peter Turnquest is calling on the government to clarify details surrounding the set up of the country’s second mobile services provider amid what he believes to be confusion about what will happen to the 51 per cent majority share in the company.

The East Grand Bahama MP also questioned why a new company would invest in infrastructure only to receive a 49 per cent stake. He said the framework may lead to higher prices and “stymied” competition.

State Minister for Finance Michael Halkitis said last week that the government would be the majority shareholder when the new mobile services company is launched, but that the shares would eventually be offered to Bahamian investors.

However, Prime Minister Perry Christie has insisted that the government will not own 51 per cent of shares in the country’s second mobile services provider.

But according to the government’s request for proposals (RFP) for operating a cellular network, the government is “prepared to serve as the initial and sole shareholder” of HoldingCo, an entity that will be formed on behalf of the majority shareholder, which the government hopes will be the Bahamian people.

“…The government’s shareholding in HoldingCo would only be temporary in nature, pending an offering of the shares in HoldingCo to eligible investors,” the RFP, which was tabled in the House of Assembly last Wednesday, says.

The RFP says the government’s primary role will be to facilitate the transfer of shares to Bahamian investors once HoldingCo is formed.

Reacting to the issue yesterday, Mr Turnquest said: “I clearly heard in (the prime minister’s) statement (during his contribution in the House of Assembly) that the government would own the 51 per cent. Then I heard subsequent clarification that people of the Bahamas will own the 51 per cent. I would be concerned if the government is talking about owning the (majority) shares, because it would seem counterproductive to the idea of liberalising the sector and there would be inherent conflicts between it and the government owning of 49 per cent stake in BTC.

“I don’t know how the government would be able to rationalise that in terms of policy for the sector. From a business point of view, I have questions as to what is the ‘quid pro quo’ for whomever the investor is, to invest in infrastructure for (a) 49 per cent stake. There must be some offset for them to recover their investment and in such a scenario the Bahamian people would be caught with higher prices for cellular services and it would end up stymying competition. I would have to understand more clearly what is their strategy and what is the thinking if the shares will be offered to the Bahamian people. But in terms of the details of this, we’re guessing right now. The government gave us a booklet on the slow exercises of the bidding process but in two days there’s no way to be able to read it all.”

Mr Turnquest said that he would support a move to offer shares in the company to the Bahamian people, rather than letting the government have any stake in the company.

However, he said: “The reservation I have with that is, it involves an investor risk kind of thing. I would hope that they would make sure there is adequate protection so they know the upside and the risk involved in investing in a start-up.”

The prime minister has said the government hopes to award the second mobile services provider a licence by May. Three companies are in the running to become the country’s second mobile services provider: Cable Bahamas, Digicel and Virgin Mobile.

Comments

asiseeit 4 years, 7 months ago

If the investor was smart they would offer the Bahamian people the 51% from the start and keep the kleptocrat's as far away as possible. If government is involved there will be underhanded dealings and corruption, they are just crooked, no two ways about it!

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TheMadHatter 4 years, 7 months ago

The article says "The government’s shareholding in HoldingCo would only be temporary in nature, pending an offering of the shares in HoldingCo to eligible investors,”"

Every time (including just a couple weeks ago) the Govt makes a share offering (through Royal Fidelity or one of the big time faciliators) - it is sold out on day one.

You never get to hear about how you (an ordinary citizen) can buy shares in these things. And what does he mean "eligible investors"? Does that mean black people can't buy any of the shares?

What exactly is an "eligible" investor.

Why didn't the reporter (Rashad Rolle) ask this question?

A black Bahamian citizen who works, say, as an electrician and manages his budget well and perhaps has $2000 to invest; would he be able to buy $2000 worth of shares? Or would he be told - NO - you have to have $25,000 minimum to invest and you can't be black ?

It would be great to see a follow-up article on this subject. Perhaps including a pie-chart breakdown of the share purchasers from the govt offering they did a few weeks ago. It was reported in this newspaper. What is their breakdown by citizenship? What is their breakdown by amounts purchased? Example: 10% of the buyers bought total shares exceeding $100,000 each buyer, 27% of buyers bought shares exceeding $75,000 each buyer, etc.

TheMadHatter

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