CWC buys 51 per cent of Bahamas telecoms
Published:Friday | December 3, 2010 | 12:00 AM
Mark Titus, Business Writer
The telecommunications landscape in The Bahamas is set to become the next battleground for market share.
Cable and Wireless Communications (CWC) said Thursday that that it had signed a non-binding agreement with the Bahamian Government for controlling interest in the state-run Bahamas Telecommunications Company (BTC).
Two days before its disclosure from London, Digicel Group founder Denis O'Brien had told the Financial Gleaner while in Kingston for the launch of the company's new headquarters project that he would next be looking to enter the same market.
CWC plans to acquire a controlling of 51 per cent in BTC for US$210 million to be financed from its own cash resources as well as debt. BTC will have net cash of US$15 million on closing, it said.
This is expected be completed by March next year.
"We are pleased to take this important step in the process to invest in The Bahamas, a dynamic economy and market with good potential," said Tony Rice, CWC's chief executive, in a prepared company statement.
"BTC represents a great opportunity to expand our business in a region where we have competitive strength and management capability. This opportunity would fit with our strategy to develop the CWC business through market-leading and cash-generative businesses," he said.
BTC is the sole mobile operator in The Bahamas, where it serves 392,000 customers. It also provides fixed-line and broadband services. Its combined business lines brings in revenue of US$361 million for the company
O'Brien told the Financial Gleaner that broadband was his main interest.
"We are seeking to establish a market in Bahamas; there is extremely great potential there," he said Tuesday. "We are investing heavily and expanding our network to cater for a greatly increased number of customers."
O'Brien would not reveal the projected investment or the timeline involved, but said any such move would be dependent on how soon the market there was liberalised.
Digicel is now watching the new deal secured by its rival with interest, group spokeswoman Antonio Graham said Thursday.
The liberalisation process is not set to begin any sooner than three years after the transaction is finalised between CWC and the Bahamas Government, according to CWC, which has committed to working with the state and management of BTC to develop a business plan for the telecoms sector, including the modernisation of telecommunications in The Bahamas.