FTC approves LIME, FLOW merger; sets out conditions
THE FAIR TRADING Commission has approved the merger of Cable and Wireless Communications Plc which trades as LIME and Columbus International Inc. which operates as FLOW in Barbados.
However, the agency has set out a number of conditions which must be met by the merged entity including the sale of some of its fibre cables and supporting equipment to a company capable of maintaining a viable network.
Below is the full statement which was issued moments ago. (NB)
The Fair Trading Commission, pursuant to Section 20 (5) of the Fair Competition Act CAP 326C, has completed its analysis of the merger application between Cable and Wireless Communications Plc and Columbus International Inc.
The Commission has considered the overall efficiencies of the merger and the anti-competitive effects which the merger will create in the Fixed-voice (landline) telephony and Fixed data (broadband internet) services and has determined that the merger should be approved subject to the following conditions:
1. The Commission directs that the Applicants divest the following:
• One set of fibre cables in the zones where there exists total overlap of the LIME and FLOW networks. This includes the 27 000-plus homes passed by the Karib Cable Network as well as the 28 000-plus homes passed outside of the Karib Cable Network but in the LIME/FLOW fibre network overlap.
• The Government Hill and Durants hub sites related to the fibre cables associated with the 27 000-plus homes passed by the Karib Cable Network.
• The equipment on poles related to the fibre cables where such equipment is solely used to support the fibre cables to be divested.
2. Customers of the fixed voice residential and commercial business and the fixed broadband residential and commercial business, provided by FLOW/Columbus and CWC/LIME on the divested assets related to the 27 000+ homes passed by the Karib Cable Network as well as the 28 000+ homes passed outside of the Karib Cable Network but in the LIME/FLOW fibre network overlap as at the date of this merger decision, must be released from any contracts, if they so desire, so that they are able to exercise the option to choose a service provider. During this transitional period these customers are not to be disadvantaged.
3. The applicants must submit an independent valuation of the assets to be divested within sixty (60) days after the date of the Commission’s decision.
4. The responsibility lies with the merged entity to find a suitable buyer that has the economic and technical capacity to maintain a viable network. The company(ies) interested in acquiring the divested assets must be approved by the Commission before divestment occurs.
5. Within 45 days of the date of the Commission’s decision or 30 days after closing the transaction, whichever is the later, the merged entity must vest such assets in a holding company. The Commission will appoint a trustee(s) of the holding company who will be responsible for monitoring the ongoing management of the divested assets. This will ensure that the divested assets are maintained intact and made available for sale.
6. At all times the trustee(s) will be independent of the merged entity and will submit monthly reports to the Commission. Remuneration of the trustee(s) will be provided by the merged entity. The merged entity may submit suitable nominations to fill this post, however, the final determination will be made by the Commission.
7. The merged entity shall enter into agreements that allow the purchaser, for a period of 180 days, to access customers outside of the Karib Cable network but in the LIME/FLOW fibre network overlap during the period in which the purchaser deploys fibre to access these customers.
8. In the event of the failure, by the merged entity, to find a suitable buyer for the assets of the holding company within 180 days of the announcement of the Commission’s merger decision, the trustee(s) will also assume the responsibility to seek out a buyer for the assets for a maximum of five (5) years. After five (5) years the trustee(s) will place the holding company for sale in the open market.
9. After the 180 day period, the merged entity must continue to seek out a buyer and report on the progress of seeking out such a buyer by providing monthly reports which include copies of advertisements placed, any commercial interest shown and minutes of meetings held to the trustee(s) and the Commission. The merged entity must also notify the Commission when a new buyer emerges. The merged entity shall not, directly or indirectly, hold, acquire or re-acquire an interest in the divested assets.
10. In addition to the above mentioned structural condition the followng behavioural conditions must be adhered to:
• The merged entity must enter into commercial agreements for access to its poles, ducts and facilities, subject to the usual caveats of engineering suitability and access capacity. The Commission must be notified of the outcome of these commercial discussions.
• The merged entity must comply with any regulations in respect of equal and indirect access and virtual unbundled local access in accordance with the policy directives as issued by any regulatory agency with responsibility for telecommunications in Barbados.
11. The merged entity, in accordance with its commitments, must be technically ready for local number portability (“LNP”) in the fixed network by September 30, 2015 and mobile number portability (‘MNP”) in the mobile network by November 30, 2015.
12. Within three (3) months of the date of the merger being effected, in accordance with its commitment, the merged entity must offer the same prices, products and service standards to customers in areas not passed by any competing fixed voice network as those offered to customers in areas passed by a competing fixed voice network.
13. Further to the above, the merged entity must adhere to its commitment that all current LIME and Flow Broadband and Television tariffs will be set at whichever level is the lower of the tariffs offered by the two companies.
14. The merged entity must maintain net neutrality thus facilitating the use of over-the-top (OTT) services.
This document, which is the Decision, can be found on the Commission’s website, www.ftc.gov.bb. (PR)