The Bahamas Telecommunications Company - BTC would be "eaten alive" if it is not privatised

Without Privatization, BTC Would Be "Eaten Alive", Minister Says

 

By Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

May/24/04

 

 

 

The Bahamas Telecommunications Company would be "eaten alive" if it is not privatised, Minister of State for Finance James Smith said Sunday, while on the Love 97 Programme "Jones and Company."

 

"That's why the whole idea was to prepare it for privatisation", he said.

 

Minister Smith pointed out that the reason why BTC has continued to earn profits over the years is because it is a monopoly.

 

"They are fooling themselves if they think you could remove the monopoly and leave it open to competition", said the Minister, who was referring to critics who say BTC can become more efficient and survive without privatisation.

 

He added that BTC has the technical skills, "but they seem to lack the client concern that motivates big companies...these guys have been a monopoly for so long, they say 'You wait for me'."

 

Minister Smith reiterated that privatisation of BTC "is still on the table."

 

The original process that was started about five years ago has to be brought to a successful, legal ending, he noted.

 

"By that I mean we had put in place certain rules and regulations for privatisation and we went through with that and the very last thing now is to have a public announcement and to amend the public policy statement which we put in accordance with the Act", Minister Smith said.

 

He added, "This exercise has come to a close, but we will continue to talk to people until we can get what we want which would be a good price, a commitment to capital development, a commitment to training Bahamians and a commitment to upgrading the technology to first world standards."

 

While on the same programme several weeks ago, Lindbergh Smith, president of Blue Telecommunications, indicated that his company was willing to pay as much as $300 million for 49 percent of the shares in BTC.

 

Blue was the last bidder to be kicked out of the race to purchase minority ownership in the company late last year.

 

Asked if the government would be willing to accept that offer, Minister Smith said he didn't want to comment specifically on any one group.

 

"I don't want to comment on what I believe might be sort of confidential things, but there could be offers for BTC&", he said. "But you have to look very closely at how it is going to be funded. BTC is still a very well off corporation...you can probably buy BTC using its own resources."

 

Minister Smith added, "There have been some very creative financing things that were not quite [acceptable]."

New Offer For Bahamas Telecommunications Company - BTC

New Offer For BTC

Candia Dames

candiadames@hotmail.com

Nassau, Bahamas

06/02/2004

The final bidder pushed out of the race to purchase a minority ownership in the Bahamas Telecommunications Company is preparing a new offer to make to the government, the Journal has learnt.

 

But the Tenders Commission is not now open to any new proposals, as it has started another phase of privatisation, which would take on another form from the effort initiated more than five years ago.

 

Still, Blue Telecommunications plans to approach the government with a more fine-tuned and "more convincing" plan.

Company officials are hopeful that the government would at least be willing to entertain them.

  

The group's President Lindbergh Smith on Thursday was not prepared to speak to such reports.  But he did hint that his company is still interested in having a stake in BTC.  "The Minister of State for Finance alluded to the fact that BTC still has to be privatised," Mr. Smith told the Journal. "As a Bahamian, I am encouraged by the fact that the government is still committed to privatisation."

 

Financial Secretary Ruth Millar, who chairs the Tenders Commission, has told the Journal that the government has given the Commission a new mandate to review other options for privatisation of the telephone company.  But Mrs. Millar declined to say much else.

 

One source close to the Commission said Thursday that it is "utter nonsense" for Blue to still be working toward a plan for BTC.

 

"Their plan was rejected because it was not in the best interest of BTC or The Bahamas," he said.  "The Commission has been instructed to end that entire phase."

 

In rejecting Blue, the Commission revealed that there were serious concerns regarding the company's financial structure.

 

Blue reportedly planned to help pay for its stake in BTC by using the phone company's assets to borrow.

 

But a Blue official has since denied this saying that was, "totally untrue.  That was not so.  It was totally speculation that was pushed by some of the members of the Commission who do not favour privatising BTC."

 

According to the official, it was Blue's original plan to borrow on the assets of the company.

 

"The government was not comfortable with that and wanted a clearer transaction," he explained.

 

He said that in its revised plan, Blue was prepared to do an all-cash transaction.  While Blue is reportedly preparing its comeback, BahamaTel Consortium, which was headed by Tom Bain, has given up on BTC altogether.

 

Shortly after the government rejected the BahamaTel offer due to what Mrs. Millar called a deficient business plan, Mr. Bain told the Journal that his group had come to the end of the line.

 

State Minister for Finance James Smith has said that the government is "shifting gears" as it relates to the privatisation of BTC.

 

In the meantime, he said BTC has to "continue to do things to develop and expand its managerial capabilities, develop its staff, while at the same time look for efficient ways of government having to divest its interests."

 

The plan of the former government was to privatise the then Batelco and give it time to prepare for competition before opening the market.

 

But with that process failed, the new government is looking more toward liberalization of the telecommunications sector with its Telecommunications Sector Policy reportedly being revamped.

 

The idea now is reportedly to prepare BTC for the onslaught of competition that is surely to come in the near future.

 

Speaking at the Bahamas Business Outlook seminar on January 20, Minister Smith said the privatisation process "ought not to be abandoned since a privatised BTC would not only provide additional funds to government for debt reduction in 2004, but should also provide increased capacity for expanding technology including high speed data transmission capabilities which are essential to the e-commerce development effort."