Chipman: Accountants’role in BTC privatization pivotal
The president of The Bahamas Institute of Chartered Accountants(BICA)has offered commentary on the privatization of BTC, outlining the role of accountants and the importance of competition once the$210 million deal with Cable and Wireless is finalized.
Reece Chipman said that Bahamian accountants will have a large role in regards to ensuring that the telecoms sector remains competitive once it becomes liberalized.
“From the perspective of our profession, whose ultimate responsibility is to public interest, it is important for there to be accounting separation to encourage non-discrimination and competition amongst licensees,”Chipman said.”These disclosure requirements as well as IFRS(International Financial Reporting Standards) are not an unusual aspect of telecommunication legislation. It is imperative that an accounting separation framework, accompanied by accounting separation regulations be established to ensure that competition remains the focus of this arrangement.”
Accounting separation is a term often used by regulators to assure effective competition by making sure prices paid for wholesale inputs are the same across the board for competitors. Chipman said that an independent auditor is used to ensure that cost structures are in line, and noted it’s vital that privatization and competition go hand in hand.
The BICA head also mentioned the role the Utilities Regulation and Competition Authority(URCA)plays once the privatization of BTC becomes final, saying that a bulk of responsibility falls on the regulatory body to enure equality in the sector.
“It is important to ensure that the regulator operates independently and with autonomy,”he said.”As a promoter of competition, the regulator’s main function should be to ensure that the incumbent carrier does not abuse its market power by setting discriminatory and predatory pricing, unreasonable terms of interconnection, or unfair revenue sharing arrangements.”
Last month BTC signed a Memorandum of Understanding(MOU)with Cable and Wireless in relation to the purchase a 51 percent stake in the company for$210 million. The government hopes to finalize the sale by mid-February. The cellular sector will be liberalized three years after the privatization is complete, allowing other players to enter that market.
Chipman said the privatization will end up being a positive for the country despite the initial reaction from several unions who are against the deal.”From a global standpoint, The Bahamas is constantly being challenged to ascend to a more comfortable recognizable position in reference to telecommunication and many other rapidly developing avenues,”he said.”Telecommunication is the primary catalyst for the development of relationships between countries, businesses and families.
“Ideally privatization propels the establishment of social, organizational and legal infrastructures and institutions that are essential for an effective market economy. Competition must be the driving force in this endeavour.”