STATES OF JERSEY

r

JT Group Limited (“Jersey Telecom”): proposed sale

 

Lodged au Greffe on 9th October 2007
by the Minister for Treasury and Resources

 

 

 

STATES GREFFE

PROPOSITION

 

THE STATES are asked to decide whether they are of opinion -

 

            to agree, in principle, that the States’ shareholding in JT Group Limited (“Jersey Telecom”) should be sold and to request the Minister for Treasury and Resources to take the necessary steps to identify a suitable buyer for Jersey Telecom in accordance with the principles set out in tables 1 and 2 of section 9 of the Minister’s report dated 9th October 2007, with the outcomes of the sale process brought back to the States for approval.

 

 

 

MINISTER FOR TREASURY AND RESOURCES

TABLE OF CONTENTS

 

1.

Executive Summary................................................................................ 5

2.

Background to States Ownership of Jersey Telecom............................ 8

3.

Preparation of the Proposition.............................................................. 10

 

3.1

The Consultation Process............................................................ 10

 

3.2

Professional Advice.................................................................... 10

 

3.3

Reports by Relevant Parties........................................................ 11

 

3.4

Sale Principles............................................................................ 12

4.

The Regulatory Framework, Infrastructure & Consumer Protection. 13

 

4.1

Overview of the Regulatory Framework....................................... 13

 

4.2

Competition in Jersey’s Telecom Market...................................... 14

 

4.3

Maintenance of Essential Telecoms Infrastructure........................ 16

 

4.4

Consumer Protection................................................................... 19

 

4.5

Structural Separation................................................................... 19

5.

Key Considerations for Jersey Telecom.............................................. 22

 

5.1

Review of Jersey Telecom.......................................................... 22

 

5.2

Strategic Challenges faced by Jersey Telecom.............................. 23

 

5.3

The Potential of Jersey Telecom.................................................. 24

6.

Employee Related issues...................................................................... 25

 

6.1

TUPE Legislation....................................................................... 25

 

6.2

Pensions rights............................................................................ 28

7.

States Investment in Jersey Telecom and Strategic Reserves Policy 29

 

7.1

Proposition 133/2006 and the Strategic Reserve............................ 29

 

7.2

Suitability of Jersey Telecom as a Strategic Reserve Investment.... 30

 

7.3

Form of Sale............................................................................... 32

 

7.4

An Inclusive Sale Process........................................................... 33

 

7.5

Size of Stake to be Sold............................................................... 34

8.

Independent Economic Assessment of Proposals............................... 40

 

8.1

Regulatory considerations............................................................ 40

 

8.2

Gearing control........................................................................... 41

 

8.3

Sale should not reduce competition............................................... 42

 

8.4

Future ownership considerations.................................................. 43

 

8.5

Locally qualified employees......................................................... 44

 

8.6

Staged Sale assessment............................................................... 45

 

8.7

Purchaser to add value to JT....................................................... 45

9.

Sale Principles and States Approval..................................................... 46

 

Financial and Manpower Implications.................................................. 48

TABLE OF ANNEXES

 

 

Annex 1:         The Consultation Paper

 

            A1.1     Discussion Paper issued by the Minister for Treasury and Resources on the proposed sale of Jersey Telecom