LIME buyout of FLOW approved
Minister of Science Technology Energy and Mining Phillip Paulwell has approved the transfer of control of FLOW and Columbus Networks Jamaica Limited from their parent company Columbus International Inc to Cable and Wireless Communications Plc (CWC).
CWC is the parent company of Cable and Wireless Jamaica Limited (LIME).
The technology ministry announced the approval of the merger in the following release this afternoon:
Minister of Science Technology Energy and Mining today, (January 15) approved the transfer of control of Columbus Communications Jamaica Limited (FLOW) and Columbus Networks Jamaica Limited (CNJL) from their parent company Columbus International Inc. to Cable and Wireless Communications Plc.
Cable and Wireless Communication Plc (CWC) by way of letter dated November 6, 2014 and Columbus November 7, 2014, formally advised the Minister of its agreement to acquire all the shares of Columbus International Inc. and concurrently requested Ministerial approval to transfer the control of Columbus Communications Jamaica Limited (FLOW) and Columbus Networks Jamaica Limited (CNJL) from their parent company Columbus International Inc. to CWC.
CWC is the parent company of Cable and Wireless Jamaica Limited (LIME) which has fixed and mobile carrier and service provider licences to own and operate networks and provides telecommunications services into, out of and throughout Jamaica.
The authority and actions of the Minister in relation to the assignment or transfer of control of licences is provided for in section 17 (2) and (3) of the Act.
In order to be satisfied as the Minister with responsibility for Telecommunications, advice was sought from the Office of Utilities Regulation. Further, in arriving at his decision note was taken of previous advice received from the Attorney General in relation to the Digicel Claro merger that the Telecommunications Act did not expressly authorise him to impose conditions in relation to the transaction.
“Nonetheless, taking into consideration the various concerns and views expressed publicly regarding the possible implications of the transaction, and as such certain assurances were sought and received including: existing termination rates agreed as a part of existing interconnection agreements will remain in effect until a new fixed termination rate is established by the OUR; CWC will be required to observe and comply with any limitations and or requirements of the licences whose control are being transferred to CWC. ; should there be a rationalization of the networks and /or the provision of different service packages offered by Flow and LIME, customers should have the option to keep their existing package or transfer to a more favourable one; customers opting to terminate their contracts should be allowed to do so without penalties; CWC should provide access to International bandwidth on a non-discriminatory basis noting that effective competition in this market segment necessitates that smaller operators have access to concessionary terms to enable competitive resale of services; all efforts and resources will be provided to ensure that the operations of LIME and Flow are ready to enable the implementation of number portability on by May 31, 2015; and in regards to Infrastructure or Facilities Sharing CWC should ensure that other Licensees are provided with non-discriminatory access to tangibles (including ducts, poles and landing stations) which could act as a competitive bottleneck prior to the development of rules governing infrastructure sharing.
“With respect to access to International Bandwidth through their subsea joint venture, CNL-CWC Networks, Inc. (“JVCO”) CWC has indicated that the proposed CWC/Columbus merger has a zero net impact on JVCO or the subsea systems in Jamaica, which were already effectively operating together since the closing of the JVCO transaction in June 2013. JVCO nevertheless has sought to address the concerns by offering to continue to operate the subsea network business independently of the other business lines of CWC/Columbus as it has to date in providing all carrier and service provider customers with the requisite contractual assurances of confidentiality and that its information will not be used for unlawful activities such as price fixing and other anticompetitive behaviour”, the Minister emphasized.