In March of this year, the Government of The Bahamas established the BTC Privatization Committee to advise on all aspects of the privatisation which the Government wishes to conclude by the end of 2008.

Since March, the Committee has been engaged in the work necessary to prepare a proposal for Government’s consideration.

As this work is nearing the critical phase which will require public interaction, and in view of recent announcements by Government, and comments from various parties published in the media, the BTC Privatisation Committee has established a process of public information, which will provide the public with regular updates on the status of the privatization project.

Advisors

The Privatisation Committee has appointed the international accounting and business advisory firm of KPMG Corporate Finance Ltd. to advise on all aspects of the project including preparation of BTC for privatization, valuation, and regulatory and legal revision of the Bahamian communications environment. The Project is being managed by KPMG’s Bahamian office.  

Citi Group, New York, has been engaged to identify a buyer for that portion of BTC’s ownership which the Government intends to sell, and the international legal firm of Charles Russell LLP, in cooperation with The Bahamas legal firm of Higgs and Johnson, to advise on all legal aspects of the project, including the sale.

Key Government Decisions

The Honourable Prime Minister Hubert A. Ingraham recently announced the Government’s intention to liberalise fixed line services immediately on the completion of the sale of 51% of its interest in BTC and liberalise cellular services a year later.

This approach would balance the value Government receives from the sale of its stake in BTC against early introduction of competitive, quality telecommunications services throughout The Bahamas.

What this means for cellular services is that on the first anniversary of the sale, invitations to express interest in tendering for two new cellular licenses will be issued; at the same time a public consultation will be launched to enable all interested parties to express their views.

This will be followed by an auction of the two new licenses. The successful parties will then be permitted to recruit staff, build their networks and negotiate necessary technical agreements. It will be a condition of the licenses that operators will begin commercial services by the second anniversary of the BTC sale transaction.

In order to ensure that the Bahamian public receive the best possible choice, quality and price of services, the Government is determined to ensure that those who hold licenses to operate in The Bahamas must have world-class management, financial and operational strength and a track record of success.

Business Plan

BTC has been updating its Business Plan, setting out how the company sees itself developing over the next several years, and KPMG has been reviewing this plan, as it is an important document for any investor, and it is pivotal to establishing an “enterprise value” of BTC for the purposes of the sale negotiation. A report on this will be issued in the next few weeks.

Legal and Regulatory Changes

Changes to The Bahamas communications legal and regulatory environment will be necessary to enable liberalisation to take place. Recommendations in this respect are being drafted and will be completed within the next few weeks.

Universal Service Obligation

As this process moves forward, certain key principles are being adhered to. One such principle is the Government’s commitment to ensuring that all communities of The Bahamas of ten or more households benefit from a quality of service equivalent to that available in New Providence.

This privatisation is important to all who live and work in The Bahamas and to those who visit, whether for business or vacation. It will improve telecommunications services, lower costs and bring new opportunities in an enhanced communications sector to all Bahamians wishing to pursue careers in or connected to communications, including existing employees of BTC.

A great deal of necessary work has been done already in preparation for the privatisation and we expect that there will be periodic information releases from the Privatisation Committee between now and the end of the year.