Digicel wins first round in $25m Caribbean legal row over spectrum

Digicel, Denis O’Brien’s Caribbean mobile operator, has won the first round of a legal battle against the government of one of its island markets, which wants to confiscate some of Digicel’s high-speed spectrum to give it one of its rivals.

Digicel has secured an injunction against the government of the nation of Antigua and Barbuda, where it has operated since 2006.

The authorities there want to strip Digicel and another operator, Flow, of spectrum used for so-called "4G lite" mobile services, and hand it over to the state-owned telco, Antigua Public Utilities Authority (APUA).

Digicel claims the move would force it to spend $25 million (€22 million) on rebuilding its network, and it has accused the local government of allowing anti-competitive behaviour to “run amok”.

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As well as competing with Digicel in the mobile market, APUA is also the island's telecoms regulator. Flow is ultimately owned by Liberty Latin America, backed by US cable tycoon John Malone who owns Virgin Media in Ireland.

The local government has suggested it will hold negotiations with Digicel and Flow, but warned: “No court can tell us to whom we can license our spectrum.”

The row blew up over an Antigua government order last month that gave Digicel and Flow three weeks to relinquish some of their 850 megahertz spectrum. It is used to provide so-called LTE mobile data services that are faster than 3G, but not quite as fast as 4G.

Confiscate

Officials told the companies it would confiscate the spectrum and give it to APUA. Digicel rejected the request as “protectionist and anti-competitive”.

Digicel claims that APUA already has twice as much spectrum as either it or Flow, although it did not specify the type of spectrum. Digicel claims APUA is “hoarding” spectrum.

“In any other market this would be a cause for concern for the regulator. But uniquely in Antigua and Barbuda, APUA is also the regulator, and hence holds the roles of both referee and player, allowing for protectionist and anti-competitive behaviour to run amok,” Digicel said.

Digicel claims that the confiscation would mean “significant mobile disruption” for its customers for 18 months: “This is the time it would take [us] to completely rebuild the network at a cost of at least $25 million.”

Both Digicel and Flow promised to sue the government. The injunction it secured last month prevents the government from confiscating the spectrum until the courts rule upon the “fairness and legality” of the decision, Digicel said.

"This is a unilateral breach of good faith – the very basis on which Digicel entered the market in 2006," said its local chief executive, Dwayne Tulloch.

‘An attack’

“APUA does not need our spectrum, since it has plenty of its own which it doesn’t even use. As such, the government’s decision is an attack on our customers and an attack on our business and risks setting back the telecommunications sector in Antigua & Barbuda by years.”

According to local reports, a government spokesman responded to the injunction with the warning about courts not telling it to whom a license can be issued: [It is] our national asset, so we are allowing for due process, we are allowing for a period of negotiation.”