This may not be too far-fetched, given that the man at the centre of the story is one Lord Ashcroft, a British businessman and politician who is Deputy Chairman (and former Treasurer) of the UK Conservative Party, currently in opposition but widely expected to prevail in next year's election.
Ashcroft, estimated by the Sunday Times Rich List to be Britain's 37th wealthiest person with a fortune of around USD 1.8 billion, is no stranger to controversy. His tenure as Conservative Party Treasurer (1998-2001) was marked by media interest - he was seen to pay little UK income tax and was at the centre of a debate about the openness and accountability of political funding. In 2004 he clashed with the Conservatives' then leader when he offered a GBP 2 million donation on the condition that it should go to his specified candidates, rather than into general Conservative Central Office funds, which is the usual practice.
Ashcroft is also a citizen of Belize, a former British colony and the only country in Central America where English is the official language. However, despite having once served as the country's Ambassador to the United Nations, it now seems that Ashcroft has fallen out of favour with the current Belizean Government.
Earlier this week, the country's Prime Minister pushed through a bill amending the country’s Telecommunications Act and allowing the Government to seize control of the incumbent national telecoms operator Belize Telemedia, with shares to be distributed to domestic investors.
The telco was was incorporated by the UDP Government in 1987 to 'Belizeanize' telecommunications, replacing the control of Cable & Wireless with a national company. According to the current PM Dean Barrow, also a UDP man, it was always intended for the new entity to be majority owned by the citizens of Belize and not by the Government. Barrow claims that the national telecoms operator delivered excellent returns to the many Belizeans who invested in the company in the early years of its life, but became the victim of "the predatory designs of one man" in 1992. The alleged predator? Lord Ashcroft.
Barrow accuses the 1989-93 administration of the rival People's United Party of selling shares in the operator to Michael Ashcroft "at a rate and in a manner that was counterintuitive and counter nationalistic." The Prime Minister states that under the company's UDP-drafted Articles of Association there was a 25% cap on the shares that could be sold to any one person or entity. The point of this, explains Barrow, was so that no single individual could dominate the company and in order to make the ownership as widely Belizean as possible. In violation of this Article, alleges Barrow, the PUP presided over an ever increasing transfer of shares to Ashcroft. This process, says the Prime Minister, was interrupted by the 1993-98 UDP return to power, but restarted as soon as the PUP came to power once again.
Barrow states that Ashcroft secured a very advantageous agreement with the PUP Government in 2006, whereby he was guaranteed a certain level of return on his investment in the telecoms company. According to this agreement, says Barrow, Ashcroft could in any year declare that the telco had not delivered the stipulated return, declare how much the shortfall was "and simply not pay his taxes until the so-call shortfall had been recovered." Barrow claims that this is exactly what happened in 2007, so that thereafter Belize Telemedia "ended up paying no business tax, no customs duties, no imprest of any kind." The Prime Minister also claims that Belizean consumers have been entirely at the mercy of their incumbent telecoms operator because Ashcroft's agreement with the Government prevented the country's Public Utilities Commission (PUC) from regulating Belize Telemedia's rates.
The situation, as described by Barrow, became yet more advantageous for the incumbent operator when all other existing telecoms licences (with the exception of that held by Speednet Communications) were revoked and VoIP was outlawed. Barrow states that Belize Telemedia "is able to refuse interconnection to any and everyone" and that "the PUC cannot, for any cause and no matter what the complaint, in any way touch or alter" the telco's licence. Further, the Prime Minister states, the all Government departments and agencies are bound to use only Belize Telemedia's services "at onerous pre-arranged rates until 2015."
Barrow has also dismissed the idea of Speednet Communications - whose CDMA service has 17.71% of the country's mobile subscriptions according to WCIS -being a meaningful competitor for Belize Telemedia. The Prime Minister claims that 77.38% of Speednet is owned by three companies headquartered at premises owned by Michael Ashcroft, and controlled by two trusts owned by the billionaire.
An article in the UK's Independent newspaper yesterday quotes Lord Ashcroft's spokesman as saying that the peer has not owned Belize Telemedia for some time and that his name had been dragged into the controversy for purely political reasons. Even if there is some truth in this, the article opines that the ferocity of Dean Barrow's attack suggests the Belize Government is out to break Lord Ashcroft's influence in the country, which could lead to more attacks and embroil the Conservative Deputy Chairman in a series of controversies most unwelcome to his party leader, the UK's prospective next Prime Minister, David Cameron.
The same article notes that the attack on Lord Ashcroft by Belize's Prime Minister echoed the feelings of UK Labour MPs struggling to hold on to marginal parliamentary seats against candidates generously bankrolled by the billionaire Conservative. The Labour MP Gordon Prentice, who has campaigned to have Lord Ashcroft banned from making political donations in the UK until his tax status is cleared up, said on Thursday: "I'm delighted that the change of government is bringing a wind of change to Belize. I just hope David Cameron is listening to what the Belize Prime Minister is saying."
Speculation about the UK politics and the outcome of the next General Election here is somewhat beyond the remit of this blog. Speculation about how this development might affect the plans of international telecoms group, however, is more familiar territory.
If we choose to believe Mr. Barrow's allegation about the Belize telecommunications market not really being contested by genuinely competing players,the Central America country is one of the last markets in the Americas where a monopoly situation persists.
Another is Costa Rica, where incumbent telecoms and power company Instituto Costarricense de Electricidad (ICE) currently has no competitors. This is set to change, however, according to the Global Mobile Daily service of Informa Telecoms & Media, which reported in June that the country's Ministry for the Environment, Energy and Telecommunications (Minaet) is planning to offer three new mobile licences by April 2010. It seems that these licences will either be issued via a traditional auction process or by combining a pre-selection process with an auction. The tender will reportedly be launched next month, with the first mobile licence to be awarded in March or April 2010. Companies interested in bidding are said to include including Millicom International Cellular, Telefónica, Digicel and Cable & Wireless.
The latter, which once enjoyed a monopoly position in many now liberalised Caribbean island markets continues to trade without competiton in two tiny territories - Montserrat (population 4,488) and the Falkland Islands (population 3,140). To the best of my knowledge, no one has expressed an interest in competing with the Cable & Wireless operations in those markets.
Possibly more attractive for any prospective new entrant would be the Bahamas, another market dominated by a single operator. The population of these islands is a little larger than that of Belize and a bit smaller than that of Suriname, where the monopoly of incumbent telco Telesur was only broken in late 2007, when Digicel entered the country's mobile arena.
It is Digicel, a company founded by Irish entrepreneur Dennis O'Brien, that has broken the former Cable & Wireless monopolies across the Caribbean, and the company continues to look for new markets in both that region and among the islands of the Pacific Ocean, where it has more recently established a presence. Lavern Clark, Business Editor of the Jamaica Gleaner, wrote in December that O'Brien's company plans to expand into nine more "profitable countries", said to include Belize as well as Costa Rica.
At this point, I'd like to thank a loyal Caribbean-based reader of DevelopingTelecomsWatch for his suggestion that I write something about the situation in Belize. My correspondent wonders whether PM Dean Barrow's recent action will discourage Digicel from investing in the country. That could be the case, but I suppose Digicel might actually look more favourably at the Belize opportunity if it quickly becomes apparent that Mr. Barrow is earnestly trying to break a telecoms monopoly, i.e. rather than just trying to gain somehow from attacking the billionaire ally of his domestic political opponents.
Either way, Digicel may relish the challenge. As Lavern Clark writes, Dennis O'Brien chooses markets where it is notoriously difficult to do business.
Belize is a nation of just 320,000 people. It is intriguing, then, that this small country's internal political battles - and the appetite of its Prime Minister to take on a powerful man he accuses of subjugating the nation - could be of interest to strategic telecoms investors and have an impact on a UK General Election.