Unease about going with new C&W flow

It’s now the talk of the town –– no pun intended. And, it will almost certainly have yet more tongues wagging in the days ahead.

Yesterday’s surprise announcement that Cable & Wireless Communications (CWC) had reached a conditional agreement to acquire cable TV and Internet provider Columbus International Inc., in a deal worth about US$3.025 billion, made major waves in the telecoms world. It caught consumers, other players in the sector, Government and business officials, and even employees of LIME and Flow –– CWC’s and Columbus’ operations in Barbados and the rest of the Caribbean –– off guard. The move immediately triggered concerns about a possible return to a monopoly, or duopoly, in Barbados’ telecommunications market.

There were also questions about what the development would mean for LIME’s rivals, its existing services, rates and the staff of both companies. CWC has given some indication that customers and staff will, in fact, gain.

CEO Phil Bentley, when questioned yesterday by Barbados TODAY about the likely impacts, said Cable & Wireless would be making sure its services were efficient and that that, in turn, would allow for savings to customers. He said the move would result in “some job creation” since some of the Cable & Wireless jobs, which were being exported, could be filled by some of Flow’s full-time staff.

Flow and CWC are both saying it remains business as usual for them; but for the thousands who depend on their services –– some of whom are already concerned about current customer service and quality of service –– it is not so simple. With the takeover of one of its main rivals in the cable TV, landline and Internet segment of the market, LIME has become an even larger telecoms giant with much larger responsibility.

No less than the Good Book makes clear, to whom much is given, much is expected; and LIME will now be watched even more closely. Consumers have been vocal about their disappointments with the company, and with the concern that Cable & Wireless’ takeover of Flow will make the former complacent about service, with fewer competitors now, the major telecoms player has a responsibility to pay closer attention to the people who have made the buyout possible and who have contributed to the company being able to report, as it did yesterday, a turnaround in its performance.

Customers will have to hold Mr Bentley to his promise of improved efficiency. Ultimately, they are the ones who have the power to make or break even a giant. LIME will therefore need to impress the disillusioned if it intends to, as Mr Bentley said, go “toe to toe” with rival Digicel. The consumers surely will decide who in the end get their money each month.

Notwithstanding, when two companies of the magnitude of CWC and Columbus come together, the reality is that there is bound to be some shedding and consolidation. Just what that will mean for staff is yet to be seen. And as consumers and critics are keeping a close eye on the developments, so too are the regulators. This is perhaps a test for them –– not only the Fair Trading Commission (FTC) in Barbados but its equivalent bodies throughout the Caribbean where LIME and Flow operate –– as it is a transnational deal with national implications.

The FTC is still waiting for official notification about the massive deal that will require approval for the two to operate as one in Barbados. And there is no word yet on how Government views the move that puts the competition in a sector, which was liberalized in 2004 with the entrance of Digicel, down to two giants.

It must be noted that while there is a great hue and cry about the CWC takeover of Columbus International, observers were much less vocal last year when Columbus grabbed up Karib Cable –– even before it had completed its cabling across the island –– eight months after taking over local telecoms player TeleBarbados. Perhaps it was because Karib Cable was a newcomer and much smaller.

Whatever the criticism of Cable & Wireless, however, it has to be acknowledged that the buyout was an aggressive, strategic move to get rid of a fierce competitor. There really are still many unanswered questions about the deal, and anxiety about its implications; and the entire Caribbean is in a wait-and-see mode.

In the meantime, we will, as Barbadians are fond of doing, keep talking.

2 Responses to Unease about going with new C&W flow

  1. Bobby Gilkes
    Bobby Gilkes November 7, 2014 at 11:12 pm

    All in business

  2. Crusty November 9, 2014 at 10:16 am

    My Lime ADSL was unreliable after heavy rain and I was an early convert to Flow after seeing Lime’s unwillingness to build out fibre optic cable. Lime’s delayed response to competition was to start installing fibre and then to buyout the competition. I do not think this plan is in the best interests of customers as it will revert to a monopoly supply situation. There is a natural monopoly on the fibre but marketing can be competitive. I encourage the government to force a split with a regulated monopoly for the fibre and full competition at the retail level.


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