By TANEKA THOMPSON
Tribune News Editor
tmthompson@tribunemedia.net
CABLE Bahamas Limited has emerged as the successful bidder in the spectrum auction for the country’s second cellular services provider licence but it must now fulfil certain pre-conditions before receiving the licence, the government announced last night.
The government added that it anticipates awarding the new licence by the end of this year.
The revelation comes nearly a month after the Utilities Regulation and Competition Authority (URCA) announced that the final phase of the selection process for the country’s second mobile services provider had started, with CBL and Virgin Mobile Bahamas Limited (VMBL) fighting it out for the new licence.
The remaining conditions for licensing include CBL honouring its commitment to have at least 51 per cent of the shares of ‘NewCo’, the company which will be granted the licence, owned by ‘HoldingCo’, which will be a 100 per cent Bahamian-owned company, the government’s statement said.
“Although CBL will have management and board control, it must honour its commitment to become a party with HoldingCo, to the proposed NewCo shareholders’ agreement which, amongst other things, will grant HoldingCo certain market standard veto rights in order to protect its investment,” the statement added. “CBL must also comply with other provisions in the proposed shareholders agreement.” The new licence will be awarded to NewCo for a 15-year period and CBL’s final bid amount will be collected from NewCo as the spectrum licence fee, the statement said.
“Should the remaining conditions for completion of the licensing process fail to be satisfied, then this may result in CBL’s disqualification. In such circumstances, the RFP (request for proposals) provides that the government may declare the next best candidate as the successful applicant, which in this case would be VMBL.”
The Cellular Liberalisation Task Force’s focus will now shift to engaging CBL regarding the stated pre-conditions, while at the same time soliciting eligible Bahamian investors for HoldingCo, the government said.
“It is anticipated that NewCo will be licenced by the end of this year,” the statement said.
Prime Minister Perry Christie has previously said the Cellular Liberalisation Task Force, formed last April, has drafted transaction documents to govern a partnership with the government that will allow for a 49-51 per cent ownership split with the selected company.
In May, the task force announced that CBL and VMBL had both moved forward to the auction phase of the selection process. A third applicant, Digicel Bahamas Ltd, withdrew from the process before that announcement.
On October 16, URCA advised the minister responsible for the electronic communications sector that the conditions for the conclusion of the spectrum auction were met, following 112 rounds of bidding.
In each round of the auction, VMBL and CBL had the opportunity to submit financial bids. The phase one score of each bidder was combined with its respective phase two score (based on its bid amount), to produce combined scores which determined the standing high bidder for that round. At the end of the auction, the winner was determined to be CBL, having submitted a financial bid of $62.5million and obtaining the highest combined score of the two bidders, the government’s statement said.
According to the task force, the government intends to delay the possible entry of a third mobile operator for “at least three years” from the commercial launch of the second cellular operator.
Comments
DonAnthony 8 years, 6 months ago
Really good news in giving the license to a 100% Bahamian owned company. The 51% of shares invested in the new holding company should be offered to the general public and not just to select institutional and high net worth individuals as appears to be the plan. The shares should be allocated from the bottom up, meaning that those Bahamians with the smallest orders should be filled first, before the big boys! This way the shareholder base will be as broad as possible and will give the little man in the Bahamas an opportunity to benefit. This is the way cable Bahamas shares were allocated in the initial public offering under the fnm govt. twenty years ago. Anything less would be dishonest and simply reserving the economic pie for the select few rich and politically connected. PLP do the fair and honest thing and allow the shares to be offered to ALL Bahamians and allocated from the BOTTOM up, so that small orders are filled first.
TruePeople 8 years, 6 months ago
dreamy thinking. Where the PLP gone get votes without poor people?
BahamaPundit 8 years, 6 months ago
Surprise. Surprise. The Government divests the Bahamian people of BTC, its crown jewel, at a fire sale price. Now, the company many government officials reportedly own a large number of shares in "wins" the license. Add to this the mysterious disappearance of Digicel from the auction, and you couldn't write a better plot of corruption. Considering BTC has annual revenue of 118 million, the auction price of 62.5 million is peanuts. It appears that Virgin was never a real participant or contender, as the final sale price was exceptionally low. One would imagine a competitive bidder would have pushed the price well over 100 million.
vinceP 8 years, 6 months ago
@ BahamaPundit,
What you need to take into consideration is that Digicel, nor Virgin Mobile Bahamas has any infrastructure in place, to realistically compete. The Virgin Mobile model of infrastructure sharing was out the question, in a country where there is just one cellular service provider.Where exactly would the redundancy exist, if Virgin had won, and piggy backed on BTC's network, and BTC once again experienced the kind of Network outage it had recently.
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