BTL Chairman addresses claims surrounding the proposed acquisition of Smart

Belize Telemedia Limited Chairman Markhelm Lizarraga has sought to clarify several claims surrounding BTL’s proposed acquisition of Speednet Communications, the operator of Smart. Lizarraga spoke with the media as he exited this morning’s Cabinet meeting in Belmopan.

He lamented that several media entities have been misinforming the public about aspects of the proposed transaction. Lizarraga also addressed the effects this merger could have on consumers, including whether greater efficiency could eventually lead to lower telecommunications rates.

Mark Lizarraga, BTL Chairman: “The cabinet has quite a bit of concerns as to the questions, especially the misinformation that has been circulating in the media by certain people and we corrected those. We repeated that we’re in a continuing process. The board basically decided that what we had seen so far merited continuing due diligence and we’re in that path. We’re still a ways to go. We still have to land with our own due diligence. We still need to get feedback from the PUC about some of the concerns which we are addressing about competition through MVNOs and other means of assuring the public that their concerns about increasing costs or BTL taking advantage of them are unfounded and that there are mechanisms in place that will address those concerns. So I think it was just about giving our side of the story as to what we’re willing to do. You know, BTL has agreed to is it three years CEO ?”

“Until December 23, 2028.”

Mark Lizarraga, BTL Chairman:  “Okay, there you go. And subsequent to that, we have agreed that we have to justify any changes in prices. We’re hoping of course and we can even say that part of the considerations are that because of the efficiencies that will begin from a market consolidation would allow for even a decrease in rates. For example, there’d be no more need for interconnection rate between BTL and Smart. Things like that. But efficiencies will bring savings to the consumers, increase dividends to the shareholders, improve working conditions and benefits for the workers, everybody.”

Lizarraga went on to outline what he views as the potential benefits of the acquisition for both small and large stakeholders. He argued that combining the companies’ resources and infrastructure could strengthen the telecommunications sector and create greater value for shareholders.

Mark Lizarraga, BTL Chairman: “All the stakeholders will benefit from this improved efficiency that will come through using the capacity that we have already in our system. Picture this, we have a system that can do a million people. Our system is only holding 225,000. Smart has 100,000. Even after consolidation we will only be using 30 something percent capacity of our system. Why have two systems? The electronics and the business that we’re in right now, things become outdated every five to seven years and they’re not cheap. Why should the country, consumers pay for it, you know? Consumers pay for having two systems, I mean, two sets of fiber, two sets of towers, two sets of everything. All of these things make great decreases, difficult in this industry. The industry is inefficient, we’re over-capitalized. So the savings from maximizing the capacity that we have will lend to all of the benefits of all the players. The small shareholder has agreed that this makes economic sense, that it makes sense for the company and the shareholders. I think the Social Security has said that they do not have any objections, that they see the benefits in it, and you can speak to them, they made presentations today as well.”

The BTL chairman also disclosed that an independent assessment of the proposed acquisition was conducted by a Brazilian agency. A second independent review was among the requests made by social partners seeking greater assurance about the transaction. According to Lizarraga, BTL has now fulfilled that request.

Social partners and other critics have raised concerns about transparency, competition and the possible impact on consumers. BTL maintains that the acquisition would reduce inefficiencies, improve network reliability and strengthen service delivery. According to Minister of Public Utilities, Michel Chebat, Cabinet will meet again next week to determine a definitive way forward with the acquisition.