KINGSTON –– Minister of Technology Phillip Paulwell yesterday 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 & Wireless Communications (CWC) Plc.
The Ministry of Technology, in a statement last evening, said Paulwell 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 authorize 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,” Paulwell 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, Cable & Wireless, which trades in Jamaica as LIME, will be required to:
Observe and comply with any limitations and or requirements of the licences whose control 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;
Provide access to international bandwidth on a non-discriminatory basis;
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;
Ensure other licencees 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,” said Paulwell. “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,” the minister added.
Cable & Wireless, last November, formally advised the technology minister of its agreement to acquire all the shares of Columbus International Inc and concurrently requested ministerial approval. The planned takeover, however, was criticized by telecommunications provider Digicel and other organizations and groups in Jamaica and the Eastern Caribbean.
Digicel chairman Denis O’Brien said the merger would reduce competition in six markets –– Jamaica, Trinidad and Tobago, Barbados, St Lucia, St Vincent and the Grenadines, and Grenada, in the Jamaica Observer of December 19, 2014.
LIME Jamaica chairman Chris Dehring said, however, that Digicel still held the lion’s share of mobile subscribers at 2.2 million, compared to LIME’s 750,000, the Observer said. He said, too, that Digicel had the buying dominance, based on market share, and could build their own fibre and link up with the Cayman Islands and into the United States.
The merger would result in LIME holding the largest market share in broadband and cable TV, which equates to 130,000 broadband subscribers with Digicel at 40,000 wi-max broadband subscribers. Dehring stressed, however, that the market potential remained largely untapped at 850,000 serviceable households. LIME, at the same time, is expecting to grow its annual revenues to US$281 million with the Flow acquisition.