Digicel bigwigs in closed talks with Cable and Wireless, Columbus execs in Port-of-Sain

cable-wireless-columbus_0Top executives of the region's three major telecommunications players hammered out their differences in a five-hour meeting hosted by the Caribbean Telecommunications Union (CTU) in Port-of-Spain.
Telecom execs Denis O’Brien (Digicel), Phil Bentley (Cable and Wireless Communications) and Brendan Paddick (Columbus Communications) met to discuss the recently announced US$3 billion acquisition of Columbus Communications by Cable and Wireless.
“If this merger takes place, you will eliminate a very vibrant competitor in Columbus, and Cable and Wireless will basically own the market in T&T, Jamaica, Barbados, St Lucia, St Vincent and the Grenadines and Grenada,” O’Brien said in a December 10 telephone interview, echoing the concerns of regional officials who fear that the proposed deal will result in the formation of a monopoly or near-monopoly in many Caribbaen markets for telephony, cable TV and broadband services.
“This is crazy stuff!” he said.

Digicel also wanted to buy Columbus, but valued it under, at 2 billion euros (US$2.49 billion). If Digicel had acquired Columbus, it would have also had a stranglehold on segments of the market in the region, a December 9 Irish Times article reported.
But asked if he would have been so outspoken for rigorous regulatory oversight in those circumstances, O’Brien said, “We would have kept Columbus and been head to head with Cable and Wireless and Lime.”
Instead, with the acquisition of Columbus by CWC, the new merged entity will control 100 per cent of fixed, broadband and submarine cables across the region, he claimed.
A Digicel-Columbus would have added competition to the Caribbean market, not eliminated it, O'Brien said.
“We would have had to go through the process with all the governments and regulators in the region. We would not have ducked that. If we buy a business, we have to get approval from the government. Simple as that.”
A high-level panel discussion with the three regional telecoms giants and local players GreenDot, DirectTV and TSTT took place behind closed doors in a forum hosted by the Caribbean Telecommunications Union (CTU), a Caricom organisation that advises regional governments on approaches to telecommunications and technology issues.
At the top of the agenda for the CTU’s two-day meeting is the formulation of a regional response to the CWC-Columbus merger.Industry observers regard the CTU’s entry as a response to a region-wide concern over issues beyond the CWC-Columbus deal itself. Internet Strategist Bevil Wooding described the deal as “part of a wider trend of market consolidation taking place in the region’s telecommunications sector” and worldwide.
In the CTU forum were delegates from the Organisation of Eastern Caribbean States (OECS), the Telecommunications Authority of T&T (Tatt) and the Eastern Caribbean Telecommunications Authority (Ectel), Belize, Suriname, Bahamas, Turks and Caicos, as well as other government and civil society organisations.

How will regional regulators respond to CWC's acquisition of Columbus?

Can telecommunications regulators from across the Caribbean see beyond their national interests and present a unified regional response to a common challenge? The recent announcement by Cable and Wireless (CWC) of its proposed US$3 billion acquisition of Columbus International could prompt them to try. If approved, the deal will make CWC the Caribbean’s largest wholesale and retail broadband service provider. But the acquisition requires regulatory approval in Trinidad and Tobago, Jamaica and Barbados.

Against this backdrop, the Caribbean Telecommunications Union (CTU) is convening a special meeting of regulators, economists and industry experts, in an effort to forge region-wide consensus around the regulatory issues arising from the proposed deal. The CTU Secretariat hopes, after the two-day meeting, to be able to advise Caribbean Community (Caricom) heads on measures to be taken to mitigate against the expected fallout from the CWC acquisition.

National regulators, such as the Telecommunications Authority of Trinidad and Tobago (TATT), and sub-regional regulators, such as the Eastern Caribbean Telecommunications Authority (ECTEL), Jamaica's Office of Utility Regulation, Barbados' Fair Trading Commission and the Bahamas' Utilities Regulation and Competition Authority, have been invited to take part in the high-level meeting, alongside invited representatives from the CTU member states.

Earlier this week, ECTEL issued a statement warning that the proposed CWC-Columbus deal could result in a negative impact on competition, and reduce choice by consumers of both services and service providers.

The sub-regional body said increased monopolisation could “erode the gains made by the liberalisation and create challenges for the entrance of new service providers.”

Both CWC and Columbus could be in breach of their licenses if they engage in activities, which can unfairly prevent, restrict, or distort competition, ECTEL said, adding that it would work with other Caribbean regulators to advise member governments on the pressing issue.

The announcement of CWC-Columbus deal, on November 6, followed a joint venture entered into by both companies in late 2013, through which they agreed to share regional subsea fibre assets. News of the development sparked concerns that the deal could return several Caribbean territories into monopoly or near-monopoly markets for telephony, cable TV and broadband services.

The upcoming CTU regulatory forum, which takes place on December 10 to 11, will also seek to address other relevant issues, such as the removal of voice and data roaming charges, number portability, over-the-top services, open reporting and social investment by telecom providers. The need for stronger, more coordinated regional regulation practices was highlighted in July of this year, after mobile phone users in Haiti, Jamaica and Trinidad and Tobago were affected by a move by major regional mobile providers LIME (a CWC subsidiary) and Digicel to block access to OTT telephony services—including several popular Voice over Internet Protocol (VoIP) applications.