The Government of The Bahamas announces that it has today concluded the Agreement by which it has contracted to sell a 51% interest in the Bahamas Telecommunications Company Ltd (BTC) to Cable and Wireless Communications Plc (CWC).  The transaction is subject to Parliamentary and regulatory approvals.

CWC, who will acquire the 51% interest in BTC through CWC Bahamas Holdings Ltd, a Bahamian holding company, will pay a consideration of US$210 million plus Bahamian stamp duty of US $7 million on the transaction.

CWC is a global, full-service communications company which operates leading communications businesses through four regional units – the Caribbean, Panama, Macau and Monaco & Islands. Its services include mobile, broadband and domestic and international fixed line services in most of its markets as well as pay-TV, data centre and hosting, carrier and managed service solutions. CWC is a FTSE 250 communications company with approximately $2.3 billion revenues, operating in 38 countries (13 of which are in the Caribbean) providing fixed line, mobile, broadband and entertainment services.  It has 8.3 million mobile, 1.8 million fixed line and 600,000 broadband customers.  CWC has been in the telecoms business for more than 140 years, and is a trade buyer with a long term strategy and interest. CWC is expected to bring synergies to BTC in terms of procurement savings, administration savings, IT implementation and support, network operations support and others.

On completion of the transaction, expected to be around the end of March 2011, CWC will be primarily responsible for the day-to-day management and operation of BTC under the terms of a Shareholders’ Agreement with the Government.

The Shareholders’ Agreement will govern the cooperation between the Government and CWC with respect to BTC’s future operations.  It provides that:

• The headquarters and day to day administration, operation and management of BTC shall be conducted substantially from premises in The Bahamas;
• A voluntary workforce Restructuring Plan will be planned to be implemented within the first twelve months following completion;
• Pension benefits enjoyed by BTC’s existing staff and retirees will not be affected by the sale.  The Government will assume responsibility for BTC pension costs going forward in excess of 10% of the salary base, which will be funded via a trust to be established by The Government. Following completion of the transaction, the Government will place $39 million in the trust.
• The Agreement provides certain conditions regarding the future sale of the interest being acquired by CWC, and provides also that the Government may, within three years of completion, sell up to 9% of BTC to the Bahamian public.

The Government will have rights of veto over certain key issues to the extent not specifically part of the Business Plan or Restructuring Plan, which include:

• approval of any material change in the nature or scope of BTC’s business;
• the relocation, outside of The Bahamas, of any material part of BTC’s business;
• decision relating to major new acquisitions or disposals of material business units; and
• borrowing above certain permitted levels.

Under the Business Plan produced by CWC, the core objectives are for BTC to become a more efficient, customer centric, business that will maintain a uniquely Bahamian culture while leveraging the regional and global scale benefits of CWC.

Key elements of the Business Plan, to be implemented over the near term, include:

• faster mobile data through smartphone packages, and prepaid data services;
• new mobile services such as mobile banking, access to music, pictures and information services;
• lower roaming costs, increased coverage, and mobile calling price;
• improved mobile experience overseas for Bahamians with increased roaming agreements;
• entertainment products, including TV on laptops and mobile phones;
• an increase in the BTC retail footprint with more stores across The Bahamas, and a significant increase in TopUp locations.  This is also expected to create significant new dealer opportunities, especially in the Family Islands;
• easier TopUp methods, and support to current TopUp dealers with marketing funds and margin improvement with technology enhancements such as eTopUp and handset TopUp;
• a focus on customer experience improvements, including improved call centres, single bills, enhanced online portals etc;
• an enhanced suite of products for businesses, as well as better international and regional connectivity;
• the maximization of opportunities of the Bahamas-Haiti cable link tapping into CWC’s global carrier services business; and
• commitment to on community projects, particularly in the areas of Environment, Education, Sports, Health, Music & Culture.

The BTC cellular exclusivity period will be extended to three years following completion, after which a liberalization process will be launched.  Additionally, any third cellular license would not be issued prior to five years following completion.

This privatization of BTC is at the centre of the Government’s communications policy.  The Government expects that with BTC under the control and management of CWC, privatization will enhance the efficiency of the Bahamian communications sector and will result in more affordable access to high quality communications services in all regions of The Bahamas.  It will also ensure that electronic communications services enable The Bahamas to increase its international competitiveness.