The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

and NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The union leader representing Bahamas Telecommunications Company (BTC) line staff yesterday expressed joy at Digicel’s decision to pull out of the second mobile licence bidding, describing the company as “not worker friendly”.

Bernard Evans, the Bahamas Communications and Public Officers Union’s (BCPOU) president, said he was “very, very pleased” that Digicel had withdrawn.

He told Tribune Business he did not believe  the union’s opposition played any role in the move.

It was revealed on Wednesday night that Digicel had pulled out of the bidding for this nation’s second mobile licence, leaving just Cable Bahamas and Virgin Mobile (Bahamas) vying to become the first competitor to BTC.

The Cellular Liberalisation Task Force said Digicel (Bahamas) “voluntarily decided not to proceed with its participation in the selection process”, giving no reason for why the cellular giant had pulled out.

“I headed the charge against Digicel after doing my homework on them,” Mr Evans told Tribune Business. “They were not worker friendly.

“I’m very very pleased at this move. Whatever we can do in terms of guarding against, or at least sounding an alarm or caution against certain practices by certain possible investors who want to enter this market, if there is any violation that we know about we will try as best we can in terms of research.”

BISX-listed Cable Bahamas and Virgin Mobile (Bahamas) are now left as the only two participants in the auction for wireless spectrum that they will use to operate their mobile networks. That auction is scheduled to take place in May, and will be administered by the Utilities Regulation and Competition Authority (URCA).

“It’s not that we are  trying to decide who comes in or not.

I don’t believe the pull out is because they don’t want the pressure of the union on them. It would be good to know the real reason why they did pull out,” said Mr Evans.

Market reaction to Digicel’s pull-out was mixed, with some observers saying they were “stunned” as to why the company - which had spent 18 months conducting due diligence on the Bahamian market, a task requiring significant investment - would withdraw at such a late stage just ahead of the spectrum auction announcement.

Others suggested that Digicel must have been fundamentally unhappy with the tender process, and some of the Government’s requirements for the winning bidder, even though it had set its sights on entering the Bahamas 13 years ago.

These observers, speaking on condition of anonymity, suggested that Digicel may have been put off by the Government’s insistence that a majority 51 per cent equity stake in the winning bidder be offered to the Bahamian people - negating much of the profit upside from winning the bid.

Other stipulations that might have created unease, they added, were the network roll-out/service start targets, plus the ‘universal service obligation’ requiring the winning bidder to service all unprofitable Family Islands.

“I’m not at all surprised,” one source said of Digicel’s withdrawal. “Just based on my knowledge of the Request for Proposal, the local ownership requirement didn’t seem to jive with the Digicel business model.

“When you add in those socio-political requirements in the RFP, it was probably all too much for them, plus the universal service requirement.

“There were just a lot of restrictive clauses in it, and Digicel wants to be a flexible operator. They like to control their own destiny. There were too many socio-political requirements for them by the look of it.”

The two remaining bidders are Cable Bahamas, which is 100 per cent Bahamian owned and listed on BISX, and Virgin Mobile (Bahamas).

Cable Bahama, in a statement issued last night, said it was now focusing on the second stage of the process, which is the May spectrum auction to be managed by the Utilities Regulation and Competition Authority (URCA).

Anthony Butler, Cable Bahamas chief executive, said: “We are delighted to have progressed to phase two. We submitted a strong proposal that clearly laid out our qualifications and readiness to deliver a reliable and affordable world class mobile service that people have been waiting for.”

“We have tremendous confidence in our people, our network, our customer service and our telecommunications experience to be a formidable player in this area of business to the benefit of the entire Bahamas.

“We are constantly enhancing our customer service levels and are implementing programmes to meet the ever increasing needs of our customers. We know that our future customers want lower prices, faster data and more reliable service.”

Mr Butler then added: “We are an island nation, and the Bahamas needs dependable and redundant networks delivering competing services.

“There needs to be choice and alternatives. So many of us live our lives and run our businesses depending on technology and communications, and we simply cannot be limited to one option.”

That statement seems to allude to the need for a second mobile operator with its own network in the Bahamas, and could be interpreted as a ‘shot’ at Virgin Mobile (Bahamas), which has said not a single word during the tender process.

Tribune Business previously revealed that John Gregg, a major investor in the Bluewater Communications Holdings group that sought to acquire BTC under the first Christie administration, is a major player in Virgin Mobile (Bahamas).

Ex-BTC executive Franklyn Winder and his Junkanoo Mobile group of Bahamians are also part of the Virgin Mobile (Bahamas) bid.

And Tribune Business can now reveal that Anthony McKinney, of McKinney, Turner & Company, is the Bahamian attorney for Virgin Mobile (Bahamas).

Virgin Mobile’s worldwide business model is to operate as country franchises of the operator founded by Sir Richard Branson, and it is unclear to what extent the franchisor is involved - in terms of equity investment, and management/technology support - in the Bahamas bid.

Virgin also tends to operate as a Mobile Virtual Network Operator (MVNO), renting network space and infrastructure from existing operators, making it effectively a reseller of someone else’s minutes and airtime.

Mr Butler’s last comment appears to be a reference to that business model, and his view that it would not be the best in the Bahamian context.

Several observers, meanwhile, yesterday suggested that Cable Bahamas new communications towers - which the company says are for its licensed wireless broadband services - might be an attempt to get a ‘head start’ on a mobile network roll-out.

And they also queried whether, if Cable Bahamas’ bid was ultimately unsuccessful, it would seek to lease the towers and associated infrastructure to the winner - effectively ensuring it wins either way.