By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Government is planning to change the communications sector policy to delay the entry of a third cellular operator until “at least three years” after the second one has begun commercial operations.
Details of the planned amendment are contained in the tender documents for the second cellular/mobile licence, which is currently out to bid.
The Communications Act’s section 114 mandates that the Government cannot issue a licence to a third cellular operator in the Bahamas until April 2016, but that date is likely too close for comfort where the second licence is concerned.
“Under the law, the Government is unable to issue a licence to a third mobile operator before April 5, 2016,” the Request for Proposal (RFP) documents, which have been obtained by Tribune Business, confirm.
However, again showing it is easier to amend policy as opposed to statute law, the RFP then reveals the Government’s hand when it comes to enhancing the second value’s licence.
“The Government intends to amend the Electronic Communications Sector Policy to delay the entry of a third cellular mobile operator for at least three years from the commercial launch of the second mobile operator,” the tender documents state.
The Christie administration’s previously announced timetable for awarding the second cellular/mobile licence indicate that it would be late 2018, at earliest, before the entry of a third Bahamian market player becomes reality.
That is because the Government, in announcing the November 13, 2014, launch of the second licence’s bidding process, said it would seek to determine the winner by April/May 2015, with that entity launching the first rival services to the Bahamas Telecommunications Company (BTC) some six months later.
The Government’s decision to amend the Sector Policy has likely been driven by a desire to enhance the second licence’s value, and thus maximise the sales price it would receive when it ‘auctions’ this off to the competing bidders.
The price bidders may have been willing to pay could have been eroded if the Government had retained the ability to licence a third mobile operator as early as April 2016 - a date just six-seven months after the second operators launches services.
While some may view the Government’s decision to delay the entry of a third operator as further stifling competition, the RFP itself makes clear that much market analysis remains to be done to determine if the Bahamian market can sustain three players.
“Before any decision is made to initiate a process for licensing a third mobile operator, the Government will consider such factors as it deems necessary,” the tender documents state.
The “size of the market”, given that the Bahamas’s population size is currently around 350,000 and whether it can support a third operator, is listed as one such factor.
Others include competitive conditions in the market following the second mobile operator’s entry, and the availability of spectrum needed to operate cellular services.
Advice from the Utilities Regulation and Competition Authority (URCA) will be sought, with another factor listed being “the extent to which there may be further demand for variety in, or an increased level of, cellular mobile services”.
Finally, the “commercial viability” of different ways to provide cellular services, such as by virtual mobile network (MVNO) model, will also be taken into account by the Government when deciding to issue a third mobile licence.
By then, both BTC and the second entrant will have become heavily entrenched in the market, with rival shares that will be difficult to dislodge.
Comments
Use the comment form below to begin a discussion about this content.
Sign in to comment
Or login with:
OpenID