Shadow Minister of Finance Peter Turnquest questioned if the government's agenda to promote cellular liberalization is an alleged attempt to allow "people with connections" to find a way to get involved in the cellular industry.

Last month, Prime Minister Perry Christie confirmed that Cable Bahamas Limited (CBL) would be the second mobile licensee. NewCo, a new Bahamian company, was formed to hold the cellular license, and CBL would be a minority shareholder of NewCo. Another Bahamian company - HoldingCo - has been incorporated with the government as the sole shareholder, and holds the majority equity ownership interest in NewCo on behalf of the Bahamian public.

During the budget debate last week Turnquest said, "I believe most Bahamians were as confused over the cellular liberalization plan as I was. NewCo and HoldingCo all seem eerily similar to Bluewater Holding Co."

Speaking with Guardian Business last week Turnquest queried, "Who are these eligible groups that are also able to invest as institutional investors, and is this a way for people with connections to find a way to get involved in the cellular industry?"

Back in March 2011, the Free National Movement (FNM) closed a deal with Cable and Wireless Communications (CWC) to sell 51 percent of Bahamas Telecommunications Company (BTC). But, weeks before election season in 2007, the Christie administration made a $260 million deal to sell 49 percent of BTC to Bluewater Ventures. Bluewater is a privately held entity, which does not have audited statements or disclose financial statements publicly. The Bluewater deal almost came to fruition, but was unsuccessful.

Former Prime Minister Hubert Ingraham said if the PLP had its way, BTC would have been sold off to Bluewater, which "had no experience in telecommunications. The company wasn't even traded on the stock market". Ingraham said, "We still aren't exactly sure who had their hands in that Bluewater pot or who the real players were behind a deal that would have purchased BTC on credit..."

Now, Turnquest has the same questions as it relates to who the investors in NewCo would be.

"It is interesting that investors in the new entity are being restricted to large institutional investors. We will have to wait and see who those investors are at the end of the day in order to see the full play in this deal," said Turnquest.

Just last month, Christie said BTC would turn into a "hugely valuable" entity as a result of the $7.4 billion acquisition of Cable & Wireless Communications (CWC) by Liberty Global. Christie made it clear that the government would still own 51 percent of the company. CWC owns 49 percent of BTC.

"If in fact that is the case, then it stands to reason that the value of the Bahamian people's investment in BTC has increased and the foundation that is said to hold two percent economic value has also increased," said Turnquest.

"All of this would have been achieved without The Bahamas' government and people having invested one additional dollar. Imagine if the government was to cash out 50 percent of that value and pay down some of its debt and invest in new productive industries? Instead they whine about what they have lost instead of looking for the opportunity," he added.

Xian Smith, Guardian Business Reporter

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