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EDITORIAL: Zeroing in on telecoms battle


EDITORIAL: Zeroing in on telecoms battle

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THE DECISION OF the Fair Trading Commission (FTC) to sanction the merger of Cable & Wireless (LIME) and Columbus Communications (Flow) appears to have raised even fewer concerns among Barbadians than the actual announcement by the two companies of their intention earlier this year.

In fact, except for a few regular intervenors/objectors, Barbadians – once they got past the initial bluster of social media ranting that was based more on emotion and “dislike” for one company or the other than on reasoned considerations – seemed resigned to the outcome, regardless of how the FTC ruled.

In today’s world of business where mergers, acquisitions and consolidations are commonplace, particularly in the telecommunications arena, the move by LIME and Flow to combine their operations would not have been a total shock to those who keep track of the industry.

The important question to be asked, however, is whether the country is better off today than it was when the two giants were going head to head for Internet, telephone and cable customers at the residential and business level. In answering the question we have to begin by conceding that the customer has so far been a major beneficiary of the LIME/Flow competition.

The rush to deploy islandwide fibre optic networks has brought new jobs and technology to scores of individual technicians and contractors; households in far-flung corners of the island now have genuine high speed Internet that appeared before to be reserved for people working or living in areas like Warrens, Bridgetown or the South Coast; consumers no longer have Multi-Choice TV as their only choice; and data packages now more closely reflect what customers in metropolitan markets of the world have taken for granted for so long.

It is therefore very comforting to note that the FTC has mandated that the two companies must agree to give up a significant portion of their fibre network to a new entity wherever there is overlapping capacity. The significance of this, the experts suggest, is that given the extent to which the two were engaged in fierce competition to wire the island, this new player will start the game with, in principle, the ability to serve customers almost islandwide.

Therefore, the road map of the FTC should ensure that competition continues and that the consumer is the winner. We are also heartened by the initial reaction of cellular service provider Digicel that they welcome the conditions set by the FTC for the final approval of the merger. We are sure Digicel’s customers would support the company’s foray into this area of the telecommunications market.

Now that the national focus is on telecommunications, however, it would be opportune for policymakers to rearticulate the national policy given the dynamics of this area, which is characterised by frequent and phenomenal change. Is there room for encouraging a larger number of players in the market since we have essentially operated in an environment of two or three players? Is there room for a thorough examination of pricing structures, given what is happening in the international market? Is it time for the FTC to be involved in the regulation of all aspects of telecommunications, and not just selected areas as now occurs?