Blue Making New Bid For BTC
29th November 2004
One year after it was kicked out of the race to purchase a minority stake in The Bahamas Telecommunications Company (BTC), the Blue Telecom group has made adjustments to its bid to try to meet the government’s expectations and the reality of the existing value of BTC.
Blue’s President Lindbergh Smith, in an interview with the Bahama Journal on Sunday, said his company still has the right ingredients to become the long-awaited strategic partner in the state-owned telephone company.
The Bahama Journal contacted him after Minister of State for Finance James Smith indicated that while there is no ‘formal privatisation process’ in place, the government is still open to favourable bids.
Mr. Smith, the Blue executive, also said the need to privatise BTC is even more urgent at this time.
“I think it’s a necessity now based on the competitive forces that exist in the market place in The Bahamas,” he said. “It’s evitable that the government has to get out of the telecom business in order for the company to be on good footing to compete against entities like SRG (System Resource Group) and Cable Bahamas.”
SRG recently announced that it is starting its business and residential services and intends to compete head on with BTC.
SRG President Paul Hutton-Ashkenny said his company’s entrance into the telecom industry is an indication that the government sees the liberalization of the telecommunications sector as a critical pre-condition for achieving economic development in the country.
Industry sources say that it is most urgent that the government recognize the extreme dilemma that the entire telecom industry and the financial and business community would suffer if the government does not move quickly to relinquish its control of BTC and put it into the hands of an entity that has the financial capabilities, management and technical know-how to allow the company to be able to compete in the local market against SRG, Cable Bahamas and other competitors that are soon to come.
They say that based on the contract proposal issued to The Bahamas Communications and Public Officers Union last week, it is clear that the board and executive management team of BTC recognize that the company has to be repositioned for competition.
The proposal calls for the benefits now enjoyed by BTC employees to be slashed up to 60 percent.
“We are sure that the shareholders of Cable Bahamas and SRG are laughing all the way to the bank because of the government’s reluctance and procrastination in the privatisation process of BTC,” said one industry insider.
Minister Smith, meanwhile, said the move toward privatisation is an ongoing exercise.
“It’s just that it’s not going to be done in the way it was done originally,” he said. “If a prospective buyer came along with the right attitude and the right price, I’m sure the government would be obliged to entertain the bid. So the process may have come basically to a halt, but not the intent.”
He said that 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.”
Mr. Smith (Blue President) believes that now is the time for the government to move ahead with the privatisation process.
“For the board and management of BTC to assume that they are in a position financially and futuristically to compete in a smaller entity like SRG or Cable Bahamas is very fool hardy,” he said.
In his budget communication to parliament in May, Prime Minister Perry Christie made it clear that the recent termination of the privatisation process does not mean that the government has abandoned the privatisation of BTC.
“On the contrary, the privatisation of BTC remains an important item of my government’s economic agenda,” he said. “Accordingly, the privatisation will be re-launched as soon as circumstances reasonably allow and on a basis, moreover, that will take adequate account of the lessons that were learned in the earlier process.”