TELECOM-Union critical of T&T regulator's response to CWC-FLOW merger
PORT OF SPAIN, Trinidad,CMC – The Communications Workers Union (CWU) Sunday said the Telecommunication Authority of Trinidad and Tobago (TATT) has left the “back door wide open” for the British telecommunication giant, Cable and Wireless Communication (CWC) to complete its billion dollar merger with Columbus Communications International (CCI).
In a full page advertisement, the CWU, which represents workers at the Telecommunication Services of Trinidad and Tobago (TSTT), said TATT had emulated the position of the Jamaica government by ‘stipulating conditionalities for approval of the acquisition.
“TATT has left the back door wide open for Cable and Wireless Communications to acquire Columbus Communications (owners of FLOW) by stating that “it shall not unreasonably withhold its approval of the transaction if CWC were to suspend its shareholder rights with regard to its 49 per cent stake in TSTT among other conditions,” the CWU said.
CWC announced earlier this week that is prepared to sell its 49 per cent minority shares in TSTT as part of the conditions for the merger going though, noting that it “fully recognised that our shareholding in TSTT would need to be neutralised either by a blind trust or by disposal of our shares”.
Last year, CWC and CWI announced the deal in a joint statement, saying the proposed acquisition, valued at US$3.025 billion will enable the combined company to significantly accelerate its growth strategy, improve service delivery to customers in the region, offer customers a comprehensive portfolio of high-quality products and services, and strengthen their position against larger competitors.
But in a four-page statement issued here, TATT said that in order to allow acquisition to proceed, there must be a submission of an agreement for the complete divestment of CWC’s 49 per cent shareholding in the Telecommunication Services of Trinidad and Tobago (TSTT) in consultation with the majority shareholder, the National Enterprises Limited (NEL) and be approved in writing by the Authority.
In addition, TATT said that “to ensure within the agreement an undertaking that competition will not by stymied” and, in the meantime, CWC “suspend its rights until the sale is concluded”.
Further, TATT said that it “must be satisfied with the process moving forward” and that “the divestment be completed within a year or an extended (if required) deadline of 18 months, failing which, the Authority shall take such steps as available under law”.
In a statement, CWC said it was looking forward to working with NEL, “to agree a fair process for disposal, as embodied in our existing shareholder agreement, and are supportive of a disposal process that permits an orderly sale to be concluded in a period of not more than 18 months”
In its full page advertisement, signed by its secretary general Joseph Remy, the CWU said that it had long opposed the “blatant and flagrant conflict of interest issue with respect to Cable and wireless shareholding in TSTT.
“The union repeatedly stated that it was wrong for Cable and Wireless to continue to hold on to their stake in TSTT while at the same time seek to have approval granted for their acquisition of Columbus Communication which effectively would give them control over FLOW, a direct competitor of TSTT.
“But this is not a difficult decision to make since the ordinary citizen and any elementary school child would have been able to identify the irrefutable conflict of interest that arises with Cable and Wireless stake and their interest in FLOW,” the union said.
It noted that even though TATT had made such a pronouncement, it has not “dealt with the fact that Cable and Wireless Communications would have operated at the board level of TSTT since 1991” and having “exhaustive veto rights over major capital expenditure”.
The CWU said as a result, CWC would have been part of the recent strategic planning exercise of TSTT resulting in the five-year strategic plan for business expansion and development.
“They have been privy to all of the company’s business strategies and competitive initiatives. Against that background, how can they now be allowed a chance to enter the same market through another business entity that is competing with TSTT in the same product offering?
“They would certainly have a major competitive advantage by their intimate knowledge of all the company’s business operations and financial positions,” CWU said, adding “it is against this background that the CWU is stating that we find the TATT’s position to be very weak”.
The union said the regulators are “dancing to the music of Cable and Wireless and have endorses Cable and Wireless Communications blatant acts of corporate prostitution”.
The CWU said it is now calling on the government to “take the lead in this situation and reject any approval for the transfer of control of Columbus local operations to Cable and Wireless Communications.
“We are also demanding that the entire application process for the third mobile provider be annulled since Cable and Wireless Communications would have applied to be a provider with the clear knowledge of their 49 per cent shareholding in TSTT and with the clear knowledge that they were making a bid for acquisition of Columbus Communications which also had an application for the third license before TATT through their local operator, FLOW”.
CWU said it has begun a campaign against the acquisition and the “shallow position” adopted by TATT would not deter it from its campaign that “our local spectrum would not be exploited by a multitude of foreign multinational corporations who do not have the nation’s interest at heart”.