NOT ALL BLACK AND WHITE: Will Digicel buy what CWC must sell? (commentary)

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NOT ALL BLACK AND WHITE: Will Digicel buy what CWC must sell? (commentary)
Patrick Hoyos
Patrick Hoyos

This commentary by Patrick Hoyos first appeared in the Barbados Nation newspaper

Who said this? “We are investing heavily in cable TV, content and fibre across our markets to ensure that (our company) is positioned at the forefront of a data intensive world . . . . We look forward to expanding our footprint further in this space in the coming year . . .”

I took out the name of the company to give you the chance to guess. Okay, it was Colm Delves, CEO of Digicel, speaking in mid-2014. That is correct: Digicel, not Cable & Wireless.

The company had just acquired a regional cable company in Jamaica, Telstar, bringing its cable “footprint” in the region to six markets, as within the previous eight months it had purchased ISPs (Internet service providers) in Turks and Caicos, Dominica, Anguilla, Nevis and Montserrat. Of course, Digicel’s quiet but steady progress on the road to digital convergence was overshadowed by the news late last year that Cable & Wireless would buy Columbus International.

For a short time, Digicel railed against the new monopoly, but has now softened its position. This is perhaps because the Fair Trading Commission’s approval of the merger here contained over a dozen anti-monopoly provisions, including some divestment, while its counterpart, the Telecommunications Authority of Trinidad and Tobago, approved on condition that CWC sell off its 49 per cent stake in TSTT, the state-controlled telecoms company.

Said the Irish Times on March 31: “Digicel would be a likely buyer for this business, although Mr O’Brien would be unable to transform its operations unless he convinces the government to give him full control.”

As for Barbados, Digicel released a glowing statement late last week, praising the FTC for its decision, but noted the urgency needed to protect “the interests of consumers in Barbados . . . from the anti-competitive effects of this new Cable and Wireless monopoly in fixed voice and broadband services”.

Rubbing it in, Digicel reminded CWC that under the Fair Competition Act in Barbados, a party that fails to comply with merger conditions could be charged with “a criminal offence”. Which suggests to me that Digicel is ready to buy what CWC is being forced to sell off here, which it summarised as the “fibre assets relating to 27 000-plus homes passed by the Karib Cable network and an additional 28 000-plus homes outside (that) network, but within the combined LIME/FLOW networks”.

So that only leaves us awaiting the ruling of Ectel. According to the Irish Times, “Digicel called upon Ectel to publicly clarify the status of the competition investigation into the CWC-Columbus deal,” saying it had “particular competition concerns over the deal in the Ectel nations of St Lucia, Grenada, St Vincent and the Grenadines.”

What is it about those three especially that concerns Digicel? According to its filing on the London Stock Exchange, by buying Columbus, CWC would be getting what Columbus had itself gobbled up only recently in the Eastern Caribbean, including Karib Cable, which serves St Lucia as well as St Vincent and the Grenadines.

Added the document, “The Enlarged Group will benefit from (expanding its) network reach in markets where both CWC and Columbus operate today,” including Grenada. On top of that, said the proposal, in 2012 Columbus had purchased, among other companies, Tele (St Lucia) Inc., the latter providing telecommunications services in St Lucia.

If Ectel orders some or all of these businesses to be sold off in order for the deal to go through in its territories, and Digicel buys them up, along with that 49 per cent of TSTT and the ready-made market of 55 000 satisfied Flow customers here, then the broadband playing field in the region may become a lot more level than it seems at the moment.

Patrick Hoyos is a journalist and publisher specialising in business.

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7 COMMENTS

  1. GUESS WHAT GOES AROUND COMES AROUND.
    IN THE FUTURE DIGICEL MAY MAKE A BID FOR THE WHOLE CABLE & WIRELESS GROUP.
    IT IS ANOTHER IRELAND vs ENGLAND STORY BUT WILL LUCK ALWAYS BE WITH THE IRISH?

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  2. its so sad everything is money. we do not have choices with is so bad . this are the things our goverment have to carfully watch before signing contract.I havnt heard anyone really complain how far money finish on yoour cell phone even with using to make calls. and they do not imform you how it work ..

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    • you remember how things were when C&W was the only Telecom. company around? well my foolish little friend that why they put the rules they have in place to prevent people from doing it again, and digicel isnt "cryin' about it, they pointing out that if lime buys Columbus then they will COMPLETELY control the broadband services in st lucia grenada and st vincent and the grenadines because in those countries we ONLY have LIME anD FLOW, and if LIME buys up FLOW then who would you run to when you start geting horrible customer service from LIME? or they dont offer the services the way you want? right now you k now the price of a 10mbs connection from lime? .....more than $250, at flow its only about $110.....you see why its a problem now? think before you spit ignorance

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  3. Good Vibes.....Why should i be forced (directly/indirectly) to be a customer of CWC? I chose Karib Cable which was bought by Flow. Now i'm back where i started.....with no choice in the matter. If i didnt sign a contract with CWC, why are they calling me?
    I dont owe you any money. At least the Bajan Government is wise enough to check that. Not sure about the Lucian Government.....

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