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Gibraltar Set To Lose Telephone Operator Nynex

Joe Garcia, Panorama

06 September 2000

This story is reproduced by kind permission of Panorama at http://www.panorama.gi

Gibraltar Nynex Communications are poised to leave Gibraltar in a multi-million pounds deal with British Telecom, which will become the sole telephone operator in Gibraltar. BT already owns 50% of Gibtel, the international wing of local telephony.

In the House of Assembly last Friday, minister Ernest Britto confirmed there had been talks between BT and Nynex, but questioned by opposition spokesman on teleommunications Juan Carlos Perez, the minister would not say who was buying whom until staff had been told. An informed source assured Panorama that the company appears to have been valued at £25 million, and that BT would have to pay £12.5 million to buy out the 50% held by Nynex, which is responsible for the domestic telephone service. It was not clear if BT would want to buy the company as a whole.

It follows many months of discussions and deals and counter-deals between the two entities in an attempt to merge prior to the liberalisation of telecommunications in Gibraltar in accordance with European Union directives. The aim of the planned merger was to try and ward off competition once the liberalisation legislation was put in place. Nynex, a US telephone company, was itself merged into Bell Atlantic in 1997, although the Nynex name was not changed in Gibraltar. And as recent as 3rd July, Bell Atlantic merged with GTE to become Verizon Communications. Now, Verizon has decided to pull out of Gibraltar with the BT takeover.

Gibraltar Nynex is a 50/50 joint venture with the Gibraltar Government, while Gibtel is a 50/50 joint venture between British Telecom and the Gibraltar Government. When the old municipal telephone department became Gibraltar Nynex Communications, what finally clinched worker support was that the Gibraltar Goverment would be a partner. At the time, Nynex made a bid of £6.5 million to buy itself into local communications, with its eyes set in using Gibraltar as a stepping stone into other parts of the European Union. BT itself made a bid of £3.5million at the time, arguing that Nynex's bid was overpriced, said informed sources.

Since moving a decade ago, Nynex have been withdrawing millions of pounds in profits. Now, with the BT pay-out, they have done a good deal for themselves. It will mean the end of the American connection with Gibraltar's telephone service.

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