Bluesky Pacific Group purchase is far from a done deal

The purchase of the controlling interest in the Bluesky Pacific Group (“Bluesky), by Fiji-based Amalgamated Telecom Holding (ATH) from Amper SA is far from a done deal, although both companies have earmarked this month to sign formal agreements to a transaction that is “subject to requisite regulatory approvals and consents being obtained.”

To date there has been no public statement from the American Samoa Government (ASG) about the sale which may include ASG’s minority share interest in ASH-Cable, or the fact that the local privately owned communication company would then be managed by Vodafone Fiji — bringing in a ‘foreign government controlled” competitor into the local communications market that has essentially been dominated by the privately owned company, Bluesky Communications and the local government’s own telecommunications entity — American Samoa Telecommunications Authority.

Not highlighted in media releases from Bluesky, Amper SA or ATH is essentially the Fiji-based company is run by a six-member Board of Directors all of whom are directly or indirectly appointed by the Fiji government. According to the SUNBIZ online, as of December 2015, ATH shares are 72.6% owned by the Fiji National Provident Fund (FNPF), while the Fiji government’s share is 17.3%.

However, ATH’s Annual Report 2016 says that its “board comprises six Non Executive directors of which three are appointed by FNPF and three are Fiji directors appointed by the Fiji government.”

In turn, FNPF’s Board of Directors is completely appointed by the Fiji government, as noted by the FNPF Decree of 2011, which indicates the Attorney General and Minister of Finance do the appointments (see FNPF website).

As such, ATH’s Board is entirely composed of members appointed by the Fiji government, making the telecom company a fully government controlled entity.

ATH has three operating companies according to its website, Vodafone Fiji, Telecom Fiji and FINTEL (Fiji’s international telecommunications provider).

A glimpse of how the Bluesky Pacific Group would be run by ATH was reported in the Fiji Sun, Sept. 01, 2016 issue, where the ATH chairman, Ajith Kodagoda, is quoted as saying, “Vodafone will make money by managing it (Bluesky Pacific) and the Fiji National Provident Fund by lending to the business.”

A week later, the Fiji Sun reported Vodafone Fiji CEO, Pradeep Lai saying that they would be running Bluesky Pacific similar to their Kiribati telcom purchase where they “retained all local staff in Kiribati and today there are only two Fiji staff based in Kiribati. We wish to replicate the same work model in the three Pacific operations,” which would be in American Samoa, Samoa and the Cook Islands. At the time of the Kiribati purchase, there were a total of 20,000 subscribers, and also provided was fixed-wireless data services.

At this point, the ATH- Amper SA agreement has not been signed, and it will be interesting to see how the local government is going to handle their minority share in ASH-Cable, which is the company that owns and controls the international fiber optic cable between American Samoa, Samoa and Hawai’i and connects Samoa to existing global telecommunications infrastructure networks. The American Samoa government invested $9 million in the cable company for their minority share.

eLandia Technologies owns the majority of the shares in ASH-Cable, while eLandia International owns the majority of the shares of eLandia Technologies, which in turn is majority owned by Amper SA.

In the territory, both Bluesky and ASTCA buy fiber optic capacity from ASH-Cable, and ASTCA Executive Director Aleki Sene, Jr. told lawmakers during budget hearings last week that ASTCA pays ASH-Cable $135,000 per month for its bundle (capacity).

Locally, in order to finalize the sale to ATH, Amper requires the consent of ASG the minority shareholder in ASH Cable, and it must also obtain approvals from the US Federal Communications Commission (FCC) and possibly the United States Department of Justice. This approval process is likely to take a substantial amount of time and approval is by no means certain.

A case in point is the cancelled sale of GTA (Guam-based telecom company) to Telkom Indonesia in June this year, due in part to a long delay in US federal regulatory approval.

According to the Gumanian Magazine, the acquisition was announced a year ago, with the Guam Public Utilities Commission approving the sale, subject to final approval by the FCC. However, this approval apparently includes reviews not just with the FCC, but also with the Justice Department and the Committee on Foreign Investment. And to date, no US regulatory approval has been obtained.

Telkom Indonesia is a private company, majority-owned by the Indonesian government.

Samoa News understands the CEO of Amper SA, the head of ATH and the head of the Fiji National Provident Fund were due to arrive in American Samoa early this morning, to meet with Gov. Lolo Matalasi Moliga.

American Samoa does not have a Public Utilities Commission, so the governor is the ‘final’ word for such matters. It is supposed that the government’s ASH-Cable shares will also be discussed during the meeting.

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