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Aliv Chief: Mobile Market Too Small For Third Entrant

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Aliv’s top executive yesterday said the Bahamian mobile market is too small to “warrant” licensing a third operator to compete with itself and the Bahamas Telecommunications Company (BTC).

John Gomez told Tribune Business there were too few subscribers to justify permitting a third entrant that would further split market share with “two very competitive forces” in the existing operators.

Acknowledging that his comments may be perceived as self-interest, he said: “My view may be a bit biased but I don’t think there’s capacity for a third operator in this market.

“We have two very competitive forces in ourselves and BTC. The sheer size of the market doesn’t warrant capacity for a third. It may sound biased coming from me, but I don’t think that it warrants it.”

Mr Gomez’s comments came as the timeline for the Government to determine the “feasibility” of allowing a third mobile operator draws near. The Utilities Regulation and Competition Authority (URCA), in its 2021 draft annual plan, said the earliest such a decision could be taken is 2022 once the Government is equipped with the necessary market analysis.

URCA was supposed to initiate studies on the issue in early 2021, but nothing more has been heard from the communications industry regulator on the subject even though such research is required by the electronic communications sector policy.

“As set out in the draft electronic communications sector policy, the Government of The Bahamas will consider whether further liberalisation of the mobile telephone market should be undertaken in the form of a third mobile operator,” URCA said in late 2020.

“The policy requires that URCA provide advice and recommendations to the Government on this matter, including a feasibility and market analysis to support any recommendations made.” The “feasibility assessment” was scheduled to begin in the 2021 first quarter and conclude by mid-year.

The electronic communications sector policy previously gave URCA a 2021 year-end deadline to supply its advice and recommendations on the third mobile operator issue, while pledging that the Government would take no decision on the matter before 2022 at earliest.

The policy also acknowledged that the Government is now more than two years late in deciding whether to introduce more competition into the mobile market, as this decision should have been taken by October 2019 - some three years after Aliv ended BTC’s 16-year mobile monopoly by becoming its first competitor.

“The Government will further consider the feasibility of additional and expanded entry in cellular mobile services,” the policy document says. “In the previous electronic communications sector policy, the Government promoted the introduction of competition in the mobile sector, a goal realised with the launch of services in 2016 by the second mobile operator.

“In the liberalisation process, the Government delayed the consideration of the third mobile operator for a period of no less than three years after the commercial launch of the second mobile operator - October 2019. The Government will review this issue, in conjunction with URCA, during the life of this electronic communications sector policy to determine an appropriate policy position moving forward.”

The policy document added that the Government will both determine whether the entrance of a third mobile competitor is warranted, “and the manner and form any such liberalisation should take”.

While barriers to competition are always problematic, as they deny consumers the benefits of greater choice, product innovation and lower prices, a key concern - as alluded to by Mr Gomez - has always been whether The Bahamas, with its 400,000-strong population and estimated 360,000-380,000 mobile subscribers, has the critical mass to support a third mobile operator.

Allowing a third entrant could result in the market being split too thinly, with none of the operators able to achieve sufficient subscriber bases to reach profitability and positive operating cash flow. The capital intensive nature of any network build-out will also delay profitability by many years.

As for investing in 5G (fifth generation) mobile networks, Mr Gomez yesterday said “it behooves” Aliv and BTC to “leverage each other’s networks” and collaborate on a potential roll-out as a means to cut costs and achieve greater efficiencies.

“That’s going to be very capital intensive to go to 5G,” he added. “We are having conversations with the Government to determine how we support them and partner with them and, ultimately, the competitor. For both of us it behooves us to perhaps have conversations as to how we leverage each other’s systems and networks to benefit from 5G.”

Comments

mandela 2 weeks ago

Bring in a third and fourth, this will be the only way the prices would be satisfactory, paying 33cents per minute is way too high.

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moncurcool 2 weeks ago

His comments are self serving. Why would they want competition. Bring in the third provider. It is goon do drive down these high prices as is.

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realitycheck242 2 weeks ago

Wireless technology has evolved to the point where a third licensed mobile operator with a total wireless infrastructure would eat Aliv and BTC lunch price wise if they enter the market. Just look at the many startups in rural areas around world where its not possible to run cable (fibre) lnes

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benniesun 2 weeks ago

John gleefully took customers from BTC; and now, like a spoiled brat, he is stamping his feet and finding all sorts of excuses as to why no other operator should target his customers.

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Proguing 1 week, 6 days ago

We need a real cell phone company like Verizon or T Mobile

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