THE HOYOS FILE: The mouse that roared
I’m going to have to start today’s column by being perfectly honest with you: Up to last week, I had never heard of ECTEL. But I take comfort in my suspicion that neither had Cable & Wireless.
Well, they sure have heard of them now. It was as if all those old cannons in all those old forts in ECTEL member countries had fired off a cumulative shot across the bow of HMS Cable & Wireless, as it bore down on their respective harbours, groaning under the weight of all that gold bullion stored below its deck.
Boom! But, of course, CWC would have known all about ECTEL, so perhaps it just considered it a mouse. Well, last week, ECTEL became The Mouse That Roared.
I mean, what was CWC thinking? In a 27 000-word filing with the London Stock Exchange on its proposed acquisition of Columbus International Inc., dated November 6, it never mentions ECTEL – which (and I know you know this, my friends) is the acronym for the Eastern Caribbean Telecommunications Authority.
ECTEL, which represents five Eastern Caribbean states – Dominica, Grenada, St. Kitts-Nevis, St Lucia, and St Vincent and the Grenadines – has thus become the first regulatory agency to speak out on the proposed US$3 billion deal.
ECTEL said last Wednesday that the proposed takeover of Columbus International by Cable & Wireless Communications could have “a negative impact” on competition within the telecoms sector in the region and reduce choice for consumers.
Even though CWC, in its filing, said it was “rolling out high-speed broadband around the region,” including in four ECTEL member countries (St Kitts & Nevis, St Vincent, St Lucia and Grenada) and Columbus was providing digital cable television, high-speed Internet access and IP telephony services in the Eastern Caribbean (including in ECTEL member countries Grenada, St Lucia and St Vincent and the Grenadines) under its Flow brand, CWC said “completion” of the deal was conditional on obtaining regulatory approval in Barbados, Jamaica, Trinidad and Tobago, and the United States.
Am I wrong to hazard a guess that CWC may have felt that whatever ECTEL might rule would not affect the deal, for some reason? Or was it, perhaps, that it thought ECTEL would go along quietly with the other regulatory agencies’ decisions, which CWC clearly expects will be in favour of the deal?
If I could answer those questions, somebody would have to pay me as much as I would charge to read a contract for a cavernous loan.
Already in Trinidad people are saying that this deal represents a serious conflict of interest, because CWC is not in a position to merge Columbus/Flow’s operation there as it can in other countries in the region where it is the 100 per cent shareholder in a telecom.
Buying Flow in T&T will put CWC in competition with itself as the 49 per cent shareholder in Telecommunications Services of Trinidad & Tobago (TSTT), especially as Flow has applied for a mobile licence.
In fact, so nationalistic are the folks in T&T (or so anti-CWC, I don’t know) that they apparently would not let CWC rebrand TSTT’s mobile service as LIME, which is why it remains under the old “bmobile” name to this day.
So what’s a London-based, former imperial government-created telecom to do as it tries to regain its glory days and monopoly status in its last fertile market?
Well, according to CWC’s chief executive Phil Bentley, “We are going to fight back”.
I have to tell you that, so far at least, the CWC charm offensive has only come across as, well, offensive. I ask you to point me in the direction of one person, besides those who will benefit financially, who likes this deal or thinks it is good for the region. I am waiting to be pointed.
It is not a point in CWC’s favour to get Digicel to admit that they too had considered making an offer for Columbus, but just couldn’t offer a penny more than US$2 billion.
If that were the deal now on the table, it is possible that it would also have received the same complete lack of support and slowly growing vocal opposition as is now being meted out to the one we are presently contemplating with fear and dread.
But let us give the “mouse” the last word today: ECTEL noted that it was “mindful that over the past 15 years there has been major development in the telecommunications sector under the guidance of independent regulators in the Eastern Caribbean,” adding that “increased monopolisation therefore can erode the gains made by the liberalisation and create challenges for the entrance of new service providers.” What more needs to be said?