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KINGSTON, Jamaica, CMC – The Jamaica government says it has given the green light to Cable and Wireless Communications (CWC) for the control of Columbus Communications Jamaica Limited (Flow) and Columbus Networks Jamaica Limited (CNJL) from their parent company, Columbus International Inc.
The Ministry of Technology, in a statement, noted that it had sought the advice of the Office of Utilities Regulation (OUR), and also relied on the 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… certain assurances were sought and received,” said Science, Technology, Energy and Mining Minister, Phillip Paulwell.
The statement said these, however, did not include the existing termination rates agreed as a part of existing interconnection agreements, which will remain in effect until a new fixed termination rate is established by the OUR.
In addition, CWC will be required to observe and comply with any limitations and/or requirements of the licences, whose controls are being transferred to CWC; allow customers to keep their existing packages or transfer to a more favourable one should there be a rationalisation of the networks and/or the provision of different service packages offered by Flow and LIME; and provide access to international bandwidth on a non-discriminatory basis.
CWC will also be required to ensure that 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 31, 2015, as well as, 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.
Paulwell said that 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 anti-competitive behaviour,” he added.
Last November, Cable and Wireless, which trades here as LIME, formally advised the government of its agreement to acquire all the shares of Columbus International Inc., and concurrently requested the necessary approval.
CWC and Columbus International Inc. 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.
Digicel, CWC’s main competitor in the Caribbean, said that it is “naturally concerned about the clear and obvious challenges and potential issues posed” by the proposed acquisition.
The Eastern Caribbean Telecommunications Authority (ECTEL) has also expressed concerns over the merger.
