Thu | Oct 29, 2020

CWC-Columbus heads east for talks over ECTEL concerns

Published:Sunday | November 23, 2014 | 12:00 AM

Cable & Wireless Communications (CWC) and Columbus International say they have already initiated discussions with regulators in four of six markets and will head next to St Lucia and Grenada to meet with authorities there on their plans to merge.

Their joint statement came in response to concerns raised by Eastern Caribbean Telecommunications Regulatory Authority (ECTEL).

In a communique issued after the 16th Consultative Forum between representatives of the region's five National Telecommunications Regulatory Commissions (NTRCs) and the ECTEL directorate held in St Lucia on November 10-11, ECTEL said it feared the deal between the telecoms would reduce consumer choice and impact product pricing.

CWC and Columbus responded Friday saying: "Naturally, in any large deal relating to operations in 42 Latin American and Caribbean countries, there will be concerns in the six markets where overlapping operations exist. We are committed to ensuring that customer choice and competition are promoted by our transaction."

CWC is buying Columbus for US$3.035 billion, including debt, and plans to merge the operations.

In ECTEL's comment on the pending transaction it stated that after review of preliminary information available, and in consultation with the NTRCs, there was "deep concern that this development can potentially result in a negative impact on competition. It can also reduce choice by consumers, of both services and service providers. Since the advent of liberalisation, the prices of all telecommunications and ICT services have been significantly reduced due to competition in the region."

Increased monopolisation

It added that, against the background of gains made over the previous 15 years under liberalisation, "increased monopolisation" may "create challenges for the entrance of new service providers".

Under the current regulatory regime, "telecommunications licence holders, including Columbus and CWC, may be in breach of their licences, if they engage in activities which can have the effect of unfairly preventing, restricting or distorting competition," said ECTEL. It promised to monitor the situation and advise the ministers of member states accordingly.

CWC and Columbus said that meetings had already begun with government representatives and regulators in St Vincent & the Grenadines, Jamaica, Trinidad and Tobago, and Barbados and would head to St Lucia and Grenada this week for similar talks.

"The facts are that this transaction will bolster competition against our larger competitor (that had also bid for the same Columbus assets); it will also increase customer choice and boost long-term investment and employment across the Caribbean. We firmly believe that this transaction will be received positively by our customers and governments alike,"

the companies said in their joint statement.

The dig at the large competitor was aimed at Digicel Group.

A day before, Digicel had issued a statement citing ECTEL's concerns, saying it welcomed the regulator's intervention.

"... Each member state [has] an absolute right, morally as well as legally, to subject the proposed merger to a rigorous examination and approvals process in collaboration with their respective governments and relevant ministerial bodies," said Digicel Group CEO Colm Delves.

Digicel was out with another statement on Friday urging the Telecommunications Authority of Trinidad and Tobago "to hold firm and withstand the severe pressure" from the merger partners for "rapid approval" of the deal, while noting that CWC owns 49 per cent of TSTT.

The press statement also appeared to be offering advice to the regulator.

"Under the concessions granted to Columbus in Trinidad, CWC/Columbus are obliged to seek regulatory approval from TATT to allow the change of control of Columbus' operations in Trinidad and Tobago to CWC. TATT is obliged to consider the application and may insist on certain conditions being applied to the proposed transaction before the change of control is approved in Trinidad and Tobago," the release said.