Liberty Latin America, the owner of Cable and Wireless which purchased
Bahamas Telecommunications Company (BTC) in 2010, is proposing a
merger structure to include BTC, Cable Bahamas and ALIV.

According to the Project Bond document, Liberty’s plan calls for a Multi-
National Regional Champion — a merger in a holding company called
Liberty Newco, which it says presents a unique opportunity to create a
Bahamian national champion with regional scale.

The document says, “the combination of BTC, Cable Bahamas and ALIV
enables investment into Next Gen technology with a faster and wider
FTTH and 5G roll out than possible if advanced independently.”

This, Liberty stated, will enhance services across the Family Islands, cause
greater resiliency with less rebuilding post natural disasters, and facilitate
proactive network hardening and redundancy.

Among the social benefits, according to the proposal include: a locally
owned and led enterprise in The Bahamas ensuring the right decisions are
made for the population/customers including material government share
of voting rights; National next generation Fiber and 5G connectivity
across the islands of The Bahamas which ensures digital inclusion for all,
and increased dividend stream and upfront proceeds for the government
of The Bahamas to facilitate other social investments.

It says, “the combination creates a scaled Bahamian led regional hub with
$450 million Revenue and $150 Operating Free Cash Flow post-synergies
generating scale benefits and flexibility.”

The proposal suggests three options for the control of shares in Newco.
One is that the government should own 46 percent, Liberty would own 33
percent and Cable Bahamas the remaining 21 percent.

It is understood that the Davis administration is considering the options
proposed and has made no commitment.

Such a merger would have to be approved by the Utilities Regulator
(URCA). If it is agreed, it could mean that the end of competition and
reverting to a monopoly in telephony in The Bahamas.

The sale of BTC to Cable and Wireless by the Hubert Ingraham
administration some fifteen years ago has been extremely controversial.
It has been roundly criticized by many politicians and patriotic Bahamians.
At the time the sale price was $204 million, but the paid net was $148
million because BTC at the time had $59 million U.S. in the bank. It was
the position of Cable and Wireless that money in the bank was a life asset
as they paid for the assets and liabilities of the company.

Some six years later Cable and Wireless sold BTC to Liberty for $1.3
billion. As a result of this sale, the consensus throughout the country is
that the sale of BTC to Cable and Wireless was grossly undervalued.

Liberty, which owns Cable and Wireless, has 49 percent of the shares in
BTC but has management control and control of the Board of Directors.
Even though the Bahamas government holds 51 percent of the shares, 2
percent of the gross revenue of BTC goes to Liberty as a management fee.

BTC has moved its headquarters to what used to be the Mechanic
Workshop and Stores location at Perpall Tract and abandoned the
University Drive (John F. Kennedy) location. BTC has resold the building
to the government for $8million which is now under renovation.

Both Cable Bahamas and BTC have not brought any new product to the
market in more than a decade.

The entire Caribbean is operating at 4G, as Liberty and Digicel are the
only two companies in competition.

Liberty has not spent any money on the improvement of infrastructure
since purchasing BTC.