Digicel fails to block rival’s Jamaica deal

Cable &Wireless’s $1.85bn acquisition gets go-ahead

Denis O’Brien’s Digicel fails to stymie deal.

Denis O’Brien’s Digicel fails to stymie deal.

 

Attempts by Denis O’Brien’s Digicel telecoms company to stymie Cable &Wireless’s $1.85 billion acquisition of Columbus International in Caribbean markets on competition grounds received a blow this week when Jamaica’s minister of science, technology, energy and mining Phillip Paulwell gave the deal the green light.

Paulwell said a number of assurances were given by CWC to the Government in relation to the transaction, which was announced in November. Termination rates agreed as a part of existing interconnection agreements will remain in effect until a new fixed termination rate is established.

CWC will be required to observe and comply with any limitations and/or requirements of the licences whose control are being transferred to the group. Should there be a rationalisation of the networks and/or the provision of different service packages offered by its brands – 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, which might benefit Digicel if it decides to target them with its own packages.

CWC should provide access to international bandwidth on a non-discriminatory basis, Paulwell 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 by May 31st. In regard 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”.

Digicel declined to comment on Paulwell’s decision.

Jamaica is an important market for Digicel, second only to Haiti in terms of revenues and subscribers. In the three months to the end of June 2014 its revenues there amounted to $100 million. Digicel had 2.16 million subscribers on the island in the middle of last year.

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