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Telecommunications corporation to be ready for privatization by
year’s end According to Michael J. Symonette, president and
chief executive officer of BaTelCo, during the first term of the
FNM administration, it became apparent that before privatization
of BaTelCo could occur, some changes would have to be made. “The
company had been a monopoly forever and had a monopolistic mentality.
The government determined that changes had to be made to get us
out of thinking like a monopoly and start us thinking like a private
enterprise.”
Thus, noted Symonette, privatization was deferred
during the FNM’s first term. When the FNM won its second term in
office, it was satisfied that changes had been made and that the
time was right to begin the arduous process of privatization.
Symonette explained that the government hired two
sets of consultants to advise on the privatization process, with
a consortium headed by Deutsche Bank in London winning the contract.
While both sets of consultants varied in their numerical estimations,
both showed that a significant number of employees would need to
be let go and that work not related to telecommunications, such
as grounds work, should be outsourced. The timeline for finishing
the process was projected to be ten months.
“When Deutsche Bank told us that if we divested
our security and janitorial services we could operate with 500 employees,
the government was shocked,” stated Symonette.
After long negotiations between BaTelCo, the government
and the unions, severance packages in excess of 50 million were
offered to those who applied and were accepted for voluntary retirement.
BaTelCo reduced its number of employees from 1,978 to 1,100.
Some people who were let go were given small business
loans by the government to start companies that could do contract
work such as grounds keeping and maintenance to BaTelCo.
This entire process became difficult as those employees
who remained at BaTelCo felt that they did not receive the same
benefits as those who were let go. In early 1999, peaceful protests
took place in the streets, sick-outs occurred, morale was low and
telecommunications systems failed derailing the privatization process.
When Hurricane Floyd hit in September, it set back the process further.
Now that The Bahamas has recovered from Floyd and
emotions have cooled, the process is back on track. It is projected
that by December 2000 an informational memo will be sent out and
bidding process will be opened. The government will offer 49 percent
to a private partner and the Bahamian public will have access to
51 percent of BaTelCo, which will be offered on the Bahamian Stock
Exchange (BISX).
Symonette explained that one sticking point for
Bahamians is charges for local calls. Local calls in the Bahamas
have always been free, with international calls subsidizing the
local market.
“The international community no longer supports
that kind of operation, it thinks that toll calls should be a lot
cheaper. In fact, the Federal Communications Commission has told
the rest of the world that it has to lower toll charges. The international
community by and large agrees and it is not prepared to subsidize
local operation in any country. So the international community is
obliged to lower toll rates and find other means of dealing with
local operations,” said Symonette.
Many companies who do international business complain
that rates in The Bahamas are exorbitantly high and will look forward
to having better rates when BaTelCo is privatized.
“We are currently conducting a rate re-balancing
study. We expect to get recommendations as to what charges we should
apply for international calls and what charges we should charge
for local calls. That will have to be a political decision,” he
added.
“The sooner privatization is completed, the better,”
said Symonette. “A strategic partner will have a great ability to
influence the telecommunications development in the country. What
we are looking for is a company that can provide state-of-the-art
services to the Bahamian community at affordable prices on a consistent
basis and to ensure that all of the islands, even if they are not
profitable, have basic service.”
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In 1992, when the Free National Movement came to power, a mandate
was made to privatize Bahamas Telecommunications Corp. (BaTelCo).
The government realized that it would not have the capital investment
needed to make telecommunications state-of-the-art in The Bahamas
and that to continue to be a competitive financial center and to
have cutting-edge technology quickly, a strategic partner would
be necessary.