Government reopens Bluewaters negotiations

5 Feb 2008

Bahamian Prime Minister Hubert Ingraham has said his government is committed to another 15 days of discussions with Bluewaters, which is attempting to buy the Bahamas Telecommunications Company (BTC). He said that process will begin and end during the course of this month. ‘If we are able to come to terms with them, then that will be the entity we will do business with,’ said the prime minister. ‘If not, we will put [BTC] back on the market and entertain other bidders, but we do expect to complete the process during the course of this year.’

According to TeleGeography’s GlobalComms the sale of BTC has been a long-running affair. In early 2003 the government first announced that it would sell a 49% stake to a ‘strategic partner’. Three parties expressed interest in the sale – TransWorld Telecom, BahamaTel and Bluewaters – but by May all but the last, a private equity firm backed by John Gregg, a former top executive of British cableco NTL, had pulled out. With just one interested party in the frame the government engaged in some prolonged heavy bargaining, but no deal was forged. The issue was not dropped altogether however, and in January 2006 the Minister of State for Finance, James Smith, was quoted as saying that government officials were ‘in discussions’ with an interested party. Although nothing official was made public, it was rumoured that the Christie government had given the nod to a BHD260 million (USD260 million) deal with Bluewaters for the 49% stake, of which BHD220 million would be paid up front, BHD35 million would be paid in five years time, with a final BHD5 million due a year later. However, it soon became clear that Bluewaters was only prepared to pay BHD260 million, if BTC was guaranteed an extension of its wireless monopoly for a period of between five and seven years (with MVNOs permitted to enter the market after three years), and it was given a commitment that the company would be permitted to offer pay-TV services once Cable Bahamas’ exclusivity ends in 2009.

Not surprisingly, the issue of extending BTC’s monopoly proved extremely contentious, and once again became subject to political debate. In May 2007 Hubert Ingraham’s opposition Free National Movement (FNM) party won parliamentary elections, ousting the Christie government. Ingraham later said he had no intention of ‘offering credit’ for the purchase of BTC (referring to the BHD35 million Bluewaters promised after five years), further casting doubt on the proposed deal. Nonetheless, there remains the possibility that a deal will be done; in July 2007 the Bahamas Communications and Public Officers Union (BCPOU) announced it remained committed to the privatisation of the company, endorsing Bluewaters as its preferred strategic partner.

Bahamas, Bahamas Telecommunications Company (BTC),


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