Prime Minister Perry Christie, together with the Cellular Liberalization Task Force (CLTF) headed by former Financial Secretary Ruth Millar, yesterday issued the government's request for proposals (RFP) for parties interested in securing license to provide cellular services in The Bahamas, laying out the terms of the two-phase competitive selection process expected to be complete by April next year.
The government noted that the cost of registration - a prerequisite for accessing the RFP - is $5,000. The fee to actually submit a proposal is $25,000, and those proposals are due by February 2, 2015. The government expects to announce a winner by April.
Prime Minister Christie explained that the selection process involves a technical and financial assessment in phase one and a spectrum auction in phase two.
"Only those applicants that satisfy the minimum criteria of phase one will be allowed to participate in phase two. The successful applicant, in the end, will be the one that acquires the highest combined score of the scores derived in phase one and phase two," he said.
"With this approach, the government is seeking to strike the right balance of optimizing the revenue from allocating rights to valuable spectrum, with its broader objectives of promoting competition, investment and innovation in the cellular mobile market."
Selection process
The first phase of the RFP process is a technical and financial assessment. During this phase, an evaluation committee consisting of members of the CLTF and other experts will judge the capabilities of those parties submitting proposals. Submitters will be made to prove their financial and technical capacity to meet the terms of the RFP and provide the service at the level required.
CLTF member Michelle Grell-Bereaux explained that once the evaluation committee has determined which applicants would progress to phase two, the spectrum auction, an announcement will be made.
"URCA (the Utilities Regulatory and Competition Authority) will conduct a spectrum auction on behalf of the government. The spectrum auction currently being proposed is a multiround ascending auction that would be conducted online. That is what is currently being proposed by URCA," Grell-Bereaux reported.
At least three companies have already expressed an interest in bidding for the second cellular license: regional telecoms giant Digicel, local start-up Junkanoo Mobile and IP Solutions International (IPSI), a Bahamian company partnered with Limitless Mobile Holdings.
Third license
BTC Deputy Chair Rowena Bethel confirmed for Guardian Business yesterday that the law provides for a third license to be issued in 2016.
Bethel pointed out that under the Communications Act of 2009, the then government provided for Bahamas Telecommunications Company (BTC) to enjoy a three-year monopoly in cellular services following the privatization. Given that the company was privatized in 2011, that puts the expiration of that monopoly at April 2014, opening the market for a second licensee.
"Under the same provision, it guarantees a duopoly - two players in the market - until 2016, and in 2016, the law gives the government the option to consider the entrance of a third licensee into the market," Bethel said.
"Of course the prevailing factors and circumstances would be brought to bear before the determination of that type would be made," she added, noting that while the government has the right to issue a third license in 2016, there is no guarantee that it will do so.
In fact, the information provided by the Office of The Prime Minister to accompany the announcement of the RFP indicated that the government's intention is to delay the possible entry of a third cellular mobile operator for at least three years from the commercial launch of the second operator.
Transparency
Christie also explained the measures intended to ensure the transparency of the process.
In order to receive a copy of the RFP, an interested party must register to participate in the process, at a cost of $5,000. All registered entities will have the opportunity to seek clarification on the RFP via a virtual data room that has been set up by the task force. All queries made and responses to those queries will be posted within the data room for all registered entities to see.
"This will be the only mechanism for persons participating in this process to communicate with the task force and/or the evaluation committee about this process," the prime minister said.
The task force has created a website where persons can obtain further details about the task force and the selection process on the government's website:
http://www.bahamas.gov.bs/cellularliberalisation.

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