By TANEKA THOMPSON
Tribune News Editor
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.