The Cellular Liberalisation Task Force (CLTF) yesterday announced that it had notified the Utilities Regulation and Competition Authority (URCA) to proceed with the licensing of the new cellular mobile company NewCo. It is the next step in completing the process of introducing a new player - in this case, Cable Bahamas Limited (CBL) - into the local mobile market.
The government has announced that CBL will have a 48.25 percent shareholding, as well as board and management control, of NewCo. The licenses will be awarded after URCA has completed the final formalities of the licensing process.
In a press release issued yesterday, the CLTF explained that following the October 18, 2015 announcement that CBL had emerged as the successful bidder of the cellular mobile selection process, discussions began with CBL regarding the ownership arrangement that was stipulated in the request for proposals dated November 13, 2014.
"These discussions have led to the conclusion of the shareholders' agreement that will govern the relationship between CBL and HoldingCo," the task force said.
The press release reiterated that HoldingCo is the entity that will hold the majority equity ownership interest (51.75 percent) in NewCo on behalf of the Bahamian public. As noted by Prime Minister Perry Christie during his 2016/2017 budget address two weeks ago, HoldingCo will be formed with the government as the sole and initial shareholder in order to facilitate the timely formation and licensing of NewCo.
Noting that government's shareholding in HoldingCo is to be temporary in nature, the task force and its professional advisor, PricewaterhouseCoopers, are expected to now focus on soliciting eligible investors.
"However, this will not interfere with the timing of NewCo's launch once the relevant licenses have been granted by URCA," the task force said, adding that the government's initial intention is to offer shares in HoldingCo to institutional investors like local pension/mutual funds and co-operative credit unions. As such, the government will soon appoint a caretaker board for HoldingCo until such time as HoldingCo's shares have been divested.
Licensing and roll-out time frames
The task force reiterated that the license will be awarded to NewCo for a 15-year period.
From the time that the licenses are awarded, NewCo will be required to provide 99 percent coverage in New Providence and 80 percent in Grand Bahama, within three months; and within eight to 18 months, 99 percent coverage in Grand Bahama; Eleuthera; Abaco; Bimini; Exuma (including Black Point, Little Farmers Cay, Staniel Cay and Stocking Island); Andros; Cat Island; Long Island; San Salvador; Berry Islands; Inagua and Ragged Island; Acklins; Crooked Island; Long Cay; Rum Cay and Mayaguana. Within 24 months, CBL must provide 80 percent coverage in each of the remaining Exuma cays.
"A 99 percent coverage requirement, for example, means that NewCo will have to ensure that reliable service is available in 99 percent of the places where persons habitually live and traverse. NewCo's performance with respect to its license obligations will be secured by a performance bond to be submitted to URCA within 14 days of the licenses being granted," the task force said.
K. Quincy Parker, Guardian Business Editor
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