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NOT ALL BLACK AND WHITE: Will Digicel buy what CWC must sell?


NOT ALL BLACK AND WHITE: Will Digicel buy what CWC must sell?

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Who said this? “We are investing heavily in cable TV, content and fibre across our markets to ensure that (our company) is positioned at the forefront of a data intensive world . . . . We look forward to expanding our footprint further in this space in the coming year . . .”

I took out the name of the company to give you the chance to guess. Okay, it was Colm Delves, CEO of Digicel, speaking in mid-2014. That is correct: Digicel, not Cable & Wireless.

The company had just acquired a regional cable company in Jamaica, Telstar, bringing its cable “footprint” in the region to six markets, as within the previous eight months it had purchased ISPs (Internet service providers) in Turks and Caicos, Dominica, Anguilla, Nevis and Montserrat.

Of course, Digicel’s quiet but steady progress on the road to digital convergence was overshadowed by the news late last year that Cable & Wireless would buy Columbus International.

For a short time, Digicel railed against the new monopoly, but has now softened its position.

This is perhaps because the Fair Trading Commission’s approval of the merger here contained over a dozen anti-monopoly provisions, including some divestment, while its counterpart, the Telecommunications Authority of Trinidad and Tobago, approved on condition that CWC sell off its 49 per cent stake in TSTT, the state-controlled telecoms company.

Said the Irish Times on March 31: “Digicel would be a likely buyer for this business, although Mr O’Brien would be unable to transform its operations unless he convinces the government to give him full control.”

As for Barbados, Digicel released a glowing statement late last week, praising the FTC for its decision, but noted the urgency needed to protect “the interests of consumers in Barbados . . . from the anti-competitive effects of this new Cable and Wireless monopoly in fixed voice and broadband services”.

Rubbing it in, Digicel reminded CWC that under the Fair Competition Act in Barbados, a party that fails to comply with merger conditions could be charged with “a criminal offence”.

Which suggests to me that Digicel is ready to buy what CWC is being forced to sell off here, which it summarised as the “fibre assets relating to 27 000-plus homes passed by the Karib Cable network and an additional 28 000-plus homes outside (that) network, but within the combined LIME/FLOW networks”.

So that only leaves us awaiting the ruling of Ectel. According to the Irish Times, “Digicel called upon Ectel to publicly clarify the status of the competition investigation into the CWC-Columbus deal,” saying it had “particular competition concerns over the deal in the Ectel nations of St Lucia, Grenada, St Vincent and the Grenadines.”

What is it about those three especially that concerns Digicel?

According to its filing on the London Stock Exchange, by buying Columbus, CWC would be getting what Columbus had itself gobbled up only recently in the Eastern Caribbean, including Karib Cable, which serves St Lucia as well as St Vincent and the Grenadines.

Added the document, “The Enlarged Group will benefit from (expanding its) network reach in markets where both CWC and Columbus operate today,” including Grenada.

On top of that, said the proposal, in 2012 Columbus had purchased, among other companies, Tele (St Lucia) Inc., the latter providing telecommunications services in St Lucia.

If Ectel orders some or all of these businesses to be sold off in order for the deal to go through in its territories, and Digicel buys them up, along with that 49 per cent of TSTT and the ready-made market of 55 000 satisfied Flow customers here, then the broadband playing field in the region may become a lot more level than it seems at the moment.

Patrick Hoyos is a journalist and publisher specialising in business.