Wednesday, February 9, 2011

Cable and Wireless Communications (CWC) business plan outlines 36% reduction in per-minute phone rates within three years

Lower phone rates for BTC customers
Guardian Business Reporter

CWC business plan outlines 36% reduction in three years

BTC customers can expect to see a 36 percent reduction in per-minute phone rates within three years of Cable and Wireless Communications (CWC) taking control of the Bahamas Telecommunications Corporation (BTC), but the price reductions should commence within the first year.

Prime Minister Hubert A. Ingraham tabled the memorandum of understanding (MOU) between the government and CWC in the House yesterday, which outlined the commitments between the two parties.

During his communication, the prime minister disclosed key aspects of CWC’s five-year business plan, submitted by CWC as one of the requirements of the MOU. Several matters directly related to customer costs were addressed in the business plan.

“CWC’s plans will reduce the present rates significantly within the next three years, starting with the first year of operations here in The Bahamas,” Ingraham said, later adding, “It is not just about price reductions. It is also about value for money. We expect consumers and businesses in The Bahamas to be pleased with a new array of products and services that CWC will introduce — that is to say, more services for less cost.”

Around noon yesterday, ahead of the tabling of the MOU, the government and Cable and Wireless signed a share purchase agreement and shareholders agreement governing the terms of CWC’s acquisition of 51 percent of the shares of BTC for a consideration of $210 million plus $7 million stamp tax. During that signing, the prime minister said that the completion of the transaction is expected to occur around the end of March 2011. CWC would then take responsibility for the management and operation of BTC under terms defined in the shareholders agreement.

Under the CWC business plan, BTC customers within The Bahamas calling the Family Islands will no longer have to pay long distance charges when using a mobile-to-mobile connection. There will also be a simplification of billing schedules. The practice of charging different prices for cellular services based on the time of day the call is made will also be eliminated under the business plan.

CWC’s five-year plan also promises ‘reasonable prices’ for smartphones, such as the Blackberry, Android and iPhone. Customers using smartphones will also be able to take fuller advantage of features such as mobile banking, television, and other types of content delivery.

The plan also outlined a number of additional improvements, including better roaming arrangements, faster broadband, more connectivity, consolidated billing, Pay TV, and increased outlets to access BTC services. The prime minister said these would be delivered “while achieving an up to 36% reduction in the cost per minute of both prepaid and postpaid services over the next three years, before cellular competition begins.”