Barbados green lights CWC-Columbus merger, conditionally
The Fair Trading Commission of Barbados (FTC) Friday gave conditional approval for Cable and Wireless Communications Plc (CWC) to acquire Columbus International.
The companies mainly operate under the brand names of LIME and Flow, respectively.
In a statement, the FTC said that it had considered the overall efficiencies of the merger and the anti-competitive effects it will create in the telephony and fixed data services but has determined that the merger should be approved subject to certain conditions.
CWC is acquiring 100 per cent of Columbus for US$3.025 billion and plans to merge the two operations. Jamaica has already approved the merger of local assets, and Trinidad also signalled it would approve the deal if CWC agreed to divest its 49 per cent stake in Telecommunications Services of Trinidad and Tobago.
In response to Barbados' decision, Digicel Group on Friday called on ECTEL - the Eastern Caribbean Telecommunications Regulatory Authority - to "publicly clarify and confirm the present status of the regulatory approvals process being undertaken by them in conjunction with the National Telecommunications Regulatory Commissions.
The other NTRCs are Grenada, St Lucia and St Vincent & the Grenadines.
FTC Barbados listed 14 conditions to its approval, including that the applicants divest one set of fibre cables in the zones where there exists total overlap of the LIME and Flow networks and that customers of the fixed voice residential and commercial business and the fixed broadband residential and commercial business "must be released from any contracts, if they so desire, so that they are able to exercise the option to choose a service provider".
The FTC said that during this transitional period, these customers are not to be put at a disadvantage and that the applicants must submit an independent valuation of the assets to be divested within 60 days after the date of the commission's decision.
"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," the FTC said, adding that within 45 days, "the merged entity must vest such assets in a holding company".
The FTC said it would appoint a trustee 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," the regulator said.
It said that 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 trustees would assume the responsibility to seek out a buyer for the assets for a maximum of five years, after which the trustees will place the holding company for sale on the open market.
The FTC said that within three months of the date of the merger being effected, the new 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".