Wednesday, July 15, 2009

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BTC sale process launched By CANDIA DAMES ~ Guardian News Editor ~ candia@nasguard.com: The government is today launching the formal process intended to lead to the sale of a 51 percent stake in The Bahamas Telecommunications Company (BTC), The Nassau Guardian can confirm. This exercise is intended to lead to bidding for the state-owned company. Parties interested in purchasing BTC will be required to complete a registration form and pay a US$25,000 processing fee by July 28. The government plans to refund the fee for any party that is not chosen to move ahead to the due diligence phase of the process, but the fee will not be refunded to any prospective buyer who moves to this next phase. In addition to acquiring a 51 percent shareholding in BTC, the new owner would also gain operational control of BTC, which currently provides services to over 334,000 wireless, 132,000 fixed line and 18,500 broadband customers throughout The Bahamas. The company currently has 190 roaming agreements in place serving more than four million tourists who visit The Bahamas each year. Prospective buyers will be provided with packages describing the investment opportunity once they complete their registration form. The government is reportedly seeking a strategic partner with a strong reputation in the telecommunications industry; the ability and commitment to generate value-added revenue and cost synergies with BTC operations; financial strength and the operational platform to be able to enhance BTC's underlying network, services billing and customer service and a history of strong financial performance. This new sale process is starting weeks after the government laid the framework for a new regulatory environment for the communications sector. In May, the House passed the Communications Bill, the Utilities Regulation and Competition Authority (URCA) Bill and the Utilities Appeal Tribunal (UAT) Bill to pave the way for liberalization of the sector. Speaking in Parliament two weeks ago, Prime Minister Hubert Ingraham said, "As the government continues to work towards the privatization of BTC, and the liberalization of The Bahamas' electronic communications sector, this regulatory reform was a critical step towards ensuring that international best practices standards are met, while also enhancing the value proposition to potential partners for BTC. "With URCA in place as an independent regulator to promote good business practices and foster a competitive environment, the new regulatory regime seeks to increase both investor and consumer confidence. Now that the new regulatory structure is approved and all other due diligence largely completed by the Privatization Committee and its team of advisors, the stage is set for the commencement of the privatization process." While he had previously indicated that the government intended to use proceeds from the sale of BTC to build a new hospital, Ingraham said during his recent budget communication to Parliament that substantial proceeds from privatization would be used to reduce the borrowing requirements of the government. Ingraham also said recently that the government was committed to the execution of an efficient process to be completed within "a relatively short time frame". In order to encourage "healthy competition", fixed line telecommunications services, cable and IPTV and Internet services will be liberalized immediately upon the coming into force of the Communications Act. Mobile services will be liberalized two years following the privatization of BTC. In a communication to Parliament 11 years ago, the government announced its intention to privatize the then Bahamas Telecommunications Corporation. The assets of the corporate were vested in The Bahamas Telecommunications Company Limited in September 2002. As noted in the most recent financial statements of the company, the first privatization process saw a number of potential strategic investors conducting due diligence on the company during 2003. However, on December 12, 2003, the government-appointed Tenders Commission announced that it had not accepted any of the bids. In 2005, the government commenced negotiations with a single bidder for a 49 percent ownership of the company. A deadline of August 14, 2009 has been set for the completion of applications for pre-qualification for the new sale process. Tuesday, July 14, 2009