The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators are proposing to allow the Cable Bahamas-managed second mobile operator to deliver services via the rival Bahamas Telecommunications Company’s (BTC) for a three-year period until its own infrastructure is built out.

The Utilities Regulation and Competition Authority (URCA), unveiling its proposal in a newly-launched consultation document, said such an arrangement - known as ‘roaming’ - would deliver “substantial benefits” to Bahamian consumers.

It added that by allowing the new market entrant, currently called ‘NewCo’, to offer services via BTC’s existing infrastructure, Bahamians and tourists would be able to enjoy the fruits of choice and competition wherever they are in this nation.

‘NewCo’, in which Cable Bahamas will have a 48.25 per cent equity stake, is to build-out its own network in phases, with a series of timelines set as part of its licence conditions.

However, it will be unable to cover the whole Bahamas for the first 36 months of its existence, so URCA is proposing to impose a three-year obligation on BTC to allow its competitor to deliver services via its network. This ensures that all geographical areas in the Bahamas benefit from the arrival of competition simultaneously.

“This temporary obligation is intended to enable the second cellular mobile operator to offer its customers the ability to make and receive calls, send and receive Short Message Service (SMS) and Multimedia Messaging Service (MMS), and access data services in areas of the Bahamas where it has not yet built its cellular mobile network,” URCA explained in its consultation document.

“URCA believes that national roaming is an important mechanism in the early stages of competition where the new entrant is not in a position to offer nationwide coverage using its own network.”

It is thus moving to impose such a ‘national roaming’ agreement on BTC, which has Significant Market Power (SMP) in mobile/cellular communications via its current monopoly, for the first three years of NewCo’s existence.

In practice, such an agreement would work in much the same way as when Bahamians use their mobile phones abroad, as BTC has signed deals with foreign carriers to allow its customers to use their networks.

URCA said the likes of New Zealand, India, the UK, Denmark, Spain, Slovakia, Turkey and Canada had all used similar agreements to assist the entry of new operators into their respective mobile markets.

And there was nothing in law or communications sector policy to prevent BTC signing such an agreement with ‘NewCo’, provided the latter fulfilled its roll-out obligations and licence terms.

“Cable Bahamas (in its capacity as the winner of the auction) has identified that the second cellular mobile provider would require national roaming services from BTC during its network roll-out period,” URCA said.

“Cable Bahamas has identified that the services would be required for a period of approximately 36 months after service launch, which is the period during which the second cellular mobile operator must complete roll-out of its own cellular mobile network throughout the Bahamas.”

With BTC unlikely to aid a competitor in breaking up its lucrative mobile monopoly, URCA said regulatory intervention was needed to force the incumbent to enter into a national roaming agreement.

NewCo has to launch mobile services within six months of its licence award, and cover 75 per cent of the population on key Bahamian islands at that time. Its full network build-out must be completed after 36 months.

URCA found that during those first three years, residents in some Bahamian islands would “have no choice” but to use BTC until NewCo finished its build-out.

Others would be unable to use their NewCo cell phones when outside the existing coverage area, and forced to buy a second SIM card from BTC to ensure they had nationwide coverage.

“This means that the benefits of competition would not accrue to residents in all areas of the Bahamas simultaneously and expeditiously,” URCA said.

“URCA thus considers that national roaming brings with it substantial benefits to consumers and is committed to ensuring that the benefits of competition accrue to residents and visitors in all geographical areas of the Bahamas simultaneously.

“However, given the importance of national roaming and the differing interests of both parties, URCA is concerned that it may not be possible for a national roaming agreement to be concluded expeditiously by them,” the regulator added.

“URCA recognises that BTC controls the only national cellular mobile infrastructure for now. In the circumstances, URCA perceives that BTC might have a strong economic incentive to not facilitate national roaming to a direct cellular mobile competitor, or to only do so on terms which are unfavourable to the entrant and not reflective of those which may materialise in a competitive market.

“As such, URCA is inclined to require BTC to provide a national roaming service to the second cellular mobile operator, on regulated terms and conditions.”

That obligation would end when NewCo’s network roll-out was completed.