Posted on

Tell the facts, C&W


Mark Linehan, CEO, Digicel Barbados Ltd

Tell the facts, C&W

Social Share

I was initially pleased to see that Cable & Wireless (C&W) responded to my letter on their proposed acquisition of Columbus, but after reading their response I was disappointed to see they didn’t take my comments on board, nor did they take the opportunity to ease the concerns of the public. 

Consumers in Barbados are beyond listening to generic rhetoric about how it is good for consumers; they want the exact benefits spelt out. The return to monopolistic ways is very real if this acquisition as it stands is approved, and consumers across Barbados and the Caribbean are very mindful of this – they do not want to be dragged back to the dark old days of a Cable & Wireless monopoly.

Rather than deal with the genuine concerns being raised, C&W is trying to distract consumers and commentators with irrelevant information on its regional competition. It needs to address the public’s concerns. Here are the facts relating to some of their claims:

Claim No. 1: C&W/Columbus would be “the region’s second ICT provider” with six million customers compared with Digicel’s 13 million.

Fact No. 1: What they are not saying – the new C&W/Columbus entity will be the monopoly provider of fixed telephone and home Internet in Barbados and will have close to 50 per cent of pay TV services. They argue that because Digicel has 13 million subscribers across the globe this deal should be approved in Barbados. What they are not saying – seven million of Digicel’s customers are in the Pacific and Haiti,  where C&W and Columbus do not operate.

Claim No. 2: Digicel is in more countries than C&W.

Fact No. 2: This number of countries that Digicel and C&W operate in has no relevance to the fact that in Barbados the new C&W/Columbus entity will create monopolies and eliminate competition. This is why the Government and the regulator must analyse the merger carefully and ensure the conditions for competition will continue. 

Claim No. 3: The merger “only” impacts six out of 42 countries.

Implications

Fact No. 3: The 2012 Cable & Wireless/Columbus joint venture already brings submarine fibre to 42 markets and while this should be noted for full transparency, it is not very relevant to understanding what the merger means for the region. C&W’s and Columbus’ operations and the services they offer overlap in six countries in the Caribbean, namely, St Lucia, St Vincent and the Grenadines, Grenada, Jamaica, Barbados and Trinidad and Tobago. What this proposed merger will do is ring fence the markets for fixed telephone and home Internet and pay TV from competition.

In summary, after paying US$3 billion to buy out its main competitor (Columbus), they will be left with a monopoly on fixed line and home Internet and close to 50 per cent in pay TV. Why can’t C&W just say this and advise what this will mean for consumers?

C&W is trying to rush the approval of the merger by saying that it must be completed by February. In other parts of the world mergers can only proceed if they have no anti-competitive effect and the merging parties agree to conditions that allow competition to thrive. Why the rush?

The merger must only be allowed if conditions are imposed that prevent the new monopoly from excluding competitors and raising prices. It is interesting that C&W referenced the Digicel Claro deal in its response to my letter, but seeing that they did, it is worth noting that it took over eight months to get the Claro acquisition approved in Jamaica and even more interesting, the regulator in El Salvador never approved the acquisition of Digicel by Claro so that element of the deal never materialised. Food for thought.

Barbados cannot be allowed go back to the dark days of the C&W monopoly. Government and regulatory approval must ensure that Digicel and other operators are able to compete.

LAST NEWS