In part one of a two-part series on the disastrous decision of the FNM government to sell 51% of BTC, I will examine the contents of a speech I delivered at a Town Hall meeting back in November 2010 – some eight years ago and five months before the ill-advised sale of the telecommunications giant in April 2011. In retrospect, I am simply amazed at the number of fair warnings I gave the FNM government and how many of the same became self-fulfilling prophecies.
I said then that the sale of BTC to Cable and Wireless (CWC) called for a thirty percent staff reduction, or 333 employees. Since that sale, more than 737 Bahamians at BTC have lost their jobs and the downsizing continues. As a matter of fact, BTC has less staff than Cable Bahamas/Aliv. The company was basically stripped of its profits by its new owners who bought it at a fire sale price. They flipped it to another company while technological advancement to 5G remain non-existent. After a consideration of $204 million to the Bahamian government, CWC paid a net cash outflow of $148 million to acquire 51% of the BTC.
I predicted eight years ago that CWC was preparing to sell itself and in 2015 while I served as Deputy Chair of BTC, CWC sold itself to Liberty Global for $7.4 billion or 10 times EBITD. BTC’s EBITD stood at $121.8 million, placing its market and resale value at $1.3 billion.
The vision of the PLP was for BTC to become a major player in the regional telecommunications market. As part of our $60 million 150 gigabyte inter-island submarine cable installation project, we built fiber optic cable to Haiti as a first step and the Christie administration was in negotiations to build a fiber optic cable network to Cuba when our vision for technological advancement and regional supremacy was interrupted by our electoral loss in 2007. A change in telecommunication policy saw the exit of BTC’s President and the fire sale. BTC had the money to expand as it held $170 million in current assets in 2008, a full three years before privatization. This expansion would have also increased well-paying jobs and expand the technological literacy of The Bahamas. Additionally, the call centers would have remained in The Bahamas, greatly assisting and diversifying our economy.
The FNM government and Cable and Wireless Communications (CWC) had other plans however. The new owners had absolutely no intentions of committing huge capital outlays to expand and advance the technological footprint of the Bahamas throughout the Caribbean. There was no intention of competing with 14 other Caribbean countries for the $400 million annual CAPEX budget rather than the stand-alone $100 million of BTC.
Eight years after privatization, we are still at 4G. The Bahamas will need 5G if we are to realize many of our national developmental goals as technology will drive much of our future growth and development. For example, cell phone users still complain about the excessive number of dropped calls. How would our surgeons perform surgeries remotely without the required bandwidth capacity? Do we see the erection of additional towers to facilitate this?
Further, there is only token representation of call centers in The Bahamas where “916” information and 914 have been outsourced to Jamaica. Directory publications have also been outsourced and BTC is now a shell of its old self, thanks to the vision of the FNM.
I concurred with Lavern Clarke, the Business Editor of the Jamaican Gleaner who said on 14th November 2008 that the CWC brand has become somewhat of an “albatross, symptomatic of arrogance, lack of responsiveness to customers’ needs and poor service – all holdovers from its monopolistic era”. Clearly there were tangible warning signs of the predatory business practices of the CWC well ahead of the April 2011 sale.
I said eight years ago that I had “serious doubts that Cable and Wireless can fulfill and maintain these (developmental) mandates as the company’s track record to date, which has been described by a number of authors as a floundering and erratic organization…Cable and Wireless will not keep the Caribbean on the cutting edge of technology. It is too painful.”
I stand by those sentiments today in 2018 as the proof of the pudding is in the eating.
The Bahamas and 14 other Caribbean countries have eaten the Cable and Wireless pudding and all became sick to their stomach as it was not good for their economic health and wellbeing.
A quick analysis of the policies of the FNM under both Prime Ministers sadly share similar baneful traits. The Cable Bahamas and BTC deals by Ingraham were bad deals for the Bahamian people.
With Dr. Minnis at the helm, policy decisions have gotten progressively and increasingly worse. Specifically, the OBAN petroleum debacle; the Commercial Enterprises Bill; the hike in VAT; the downsizing of the public service, the VSEP and general handling of BPL to date; the general post office cancellation; shelving the apprenticeship program with the shipyard; the handling of the baseball stadium and the ill-advised Grand Lucayan deal were all expensive and bad policy decisions by the FNM. They were not transparent, honest and the government was not accountable in any of these issues of governance. TO DATE, ALL OF THESE POLICIES HAVE FAILED MISERABLY!
What is particularly scary is that this current crew has only been in power for seventeen months.
There is absolutely no question that the disastrous legacy of the FNM visited on the Bahamian people continues today under Dr. Hubert A. Minnis.
