CWC’s regional CEO touts benefits of a privatized BTC
Cable and Wireless Communications(CWC)has learned from and been humbled by some of the mistakes it has made in the past as a leading telecoms operator in the region, and has enough experience in privatization to know how to properly approach the restructuring of the Bahamas Telecommunications Company(BTC), CWC’s regional CEO said yesterday.
David Shaw toldThe Nassau Guardianthat CWC remains focused on developing a business plan and closing the deal with the government to acquire a 51 percent stake in BTC.
Asked whether the current climate of industrial stife at BTC could derail the deal, Shaw said,”Never say never. I’m not sure.
“We believe that in the long run we’re a good partner for The Bahamas. We’ve done lots of things across the region that would provide evidence of that. Being a standalone telecoms operator in this world of globalization is not an easy place to stay particularly with the advent of competition. Economies of scale are everything.
“So we believe that the right answer in the long run is for The Bahamas to have an industrial investor like us rather than a financial investor, but we need to make our case for everybody and we need to understand what the issues and concerns are and we need to have that dialogue.”
Shaw spoke in an interview yesterday morning at the British Colonial Hilton in downtown Nassau.
He said CWC–known in the region as LIME–was hoping to meet with representatives of BTC unions on Wednesday but”with all that was going on”that did not happen.
Wednesday was the second day of a two-day walkout by hundreds of BTC workers who strongly oppose the sale to CWC, insisting the company has a poor track record on labor relations, and BTC should remain Bahamian-owned.
Shaw said CWC is eager to meet with the unions to discuss the way forward. Union officials have so far been unwilling to meet with the preferred buyer for the company.
“We remain very open minded and very able and willing to engage in that conversation,”said Shaw, who added that a privatized BTC will mean lower rates, newer technologies and a top heavy Bahamian management structure.
He noted that CWC has been involved in privatization exercises 12 times in the past.
“It’s always an emotive time when you’re privatizing a national asset,”Shaw said.”That(the protest)doesn’t surprise me. I think a lot of the concerns people have are legitimate concerns that we need to deal with.
“So I would just reiterate that we’re keen to have the dialogue and keen to understand what people’s concerns are from them so we can do something about(them).”
Cable and Wireless in its different guises has been in the region for about 140 years, Shaw pointed out.
“It was the company that laid the first cable from Jamaica back to Europe and ever since then we’ve been trying to build our business here. For a company with that length of history there’s lots to be proud of and also some stuff that we’ve learnt from and made mistakes from and over the last 15 or 16 months we’ve been thinking very hard about how we grow the business in the Caribbean,”he said.
“We’ve been through privatization and liberalization 12 times before so we know how the process works. We’ve done lots right but we’ve also made mistakes and from those mistakes I think we’ve got enough humility to learn from them. So we feel that we can bring some knowledge to bear on how to deal with competition, how to prepare a business for competition almost uniquely in this part of the world.”
Asked to respond to the unions’claims that CWC has a bad reputation in the region, especially with regard to the treatment of staff, Shaw said,”I think any business that’s been around for 140 years ends up with a history or a heritage or a legacy that is mixed and I think it’s fair to say some of what we’ve done we’re not proud of in the past and some of what we’ve done we’re very proud of.
“Of course it’s easy for people to latch on to the stuff that’s not as good about us as what’s good about us and I guess that’s human nature.
“I think it’s also fair to say that we’ve tried to run the business too much along western lines in the past and I think that western approach, the sort of classic European approach has sometimes created and gone against the grain with the way that things actually get done in the Caribbean.”
He said CWC runs its business with people who understand the markets the company is operating in.
“Being able to understand the subtleties and nuances of a particular country is a hugely inportant part of getting the management of that particular business right,”Shaw said.
The Government of The Bahamas announced last week the signing of a memorandum of understanding(MOU)with CWC.
It is the intention under the MOU that BTC will become a significant part of CWC’s Caribbean business and strategy, that there continues to be substantial Bahamian participation in the management of the company, and that CWC affords Bahamians meaningful opportunities to work within CWC’s regional operations, the statement said.
It is expected that being part of a telecoms group such as CWC will create a variety of opportunities for Bahamians to succeed in a global organization.
The government also said there will be a restructuring of the workforce of BTC following completion of the transaction, which will be carried out on an entirely voluntary basis.
It is intended that the voluntary workforce restructuring will be concluded by the first anniversary of completion, the statement added.
CWC is acquiring the 51 percent stake for$210 million and will have a three-year exclusivity period.
Shaw said yesterday,”The economics of any business is that it needs to have costs that could withstand competition and in our experience what we found with organizations that are government run they tend to be run for a very broader set of reasons than the economics or sometimes indeed the customer.
“So what we’re looking at and working on with the management team of BTC is how we prepare the business for competition and part of that preparation is to make sure it’s got a cost base that can withstand a competitor entering the market.”