A battle ‘customers can win’
Below is an edited version of Barbados TODAY’S Marlon Madden’s interview with Cable & Wireless Communications chief executive officer Phil Bentley on Thursday, November 6, shortly after the public announcement that Cable & Wireless would be acquiring Columbus International, operators of Flow, for US$3.1 billion.
How long ago has the acquisition process started?
This is something that we spent quite a lot of time thinking about . . . . LIME is in a mobile business and we have other businesses, including broadband, and Flow has a great TV product, and increasingly businesses are coming together. This is what customers want, to be always on any time, any place; and that is what this deal does. It is one of the things good for customers.
So we have been talking with Columbus quite a lot of months now, and this is just a great combination of those companies.
It is interesting as well. In that time, as you know, Digicel, they have been buying TV businesses, they have been rolling out fibre, and they have bought Sports Max from [International Media Content Limited]. So we can’t just stand by and let them take over the industry. This is our strategic bazooka, I call it, to take them on. So this is very much engaging in very, very active competition. And when that happens the winners are the customers.
While on that note, Digicel, among others, has expressed concern about some potential challenges from a regulatory and competition perspective . . . .
It seemed a little bit like sour grapes because they didn’t get the business.
Have you informed the Fair Trading Commission in Barbados of the deal?
“Yes we have written to everybody there, including the Trading Commission. We have actually sat down with a number of [Government] ministers and given them the heads up on this transaction. Earlier in the week, we had a number of senior people meeting with some key Bajan people. But, of course, we want to make sure that this is scrutinized and we are seen to be in the interest of our customers.
If we can sell the Flow TV product to the LIME customers, we think that is a great way of countering Digicel. It might be an opportunity for some job creation as well, because Cable & Wireless had outsourced a lot of jobs offshore – outside of Barbados. As you know, we have closed down call centres, moved to El Salvador which is sort of before my time, we have outsourced engineering to Ericsson, we’ve got operations being monitored in India.
And, actually Columbus, they pride themselves in training their own people, and those people who are closest to the customer are Flow people. So I would like to think that we might actually find that we can bring jobs back into Cable & Wireless, ones that we have been exporting.
So I think we want to sit down with the [trade] unions and agree that while working with them that gives us a chance to compete with Digicel. It will not only be a good [marriage] for customers but also for jobs and training. And of course what it means is that we will be investing more money in Barbados.
Barbados is doing pretty well actually on the ICT index . . . . And together we will be stronger.
I spoke with the utility regulators today and they said they hadn’t been informed yet.
There will [be] a letter, I am sure, in their inbox tomorrow . . . . We have written to all the regulators and all the relevant Government agencies explaining the benefits of this transaction . . . . A number of letters went out to every regulator. I can assure you that we would want to do it in the appropriate way with the regulator.
And are you confident that you will get all approvals?
Yes, and I think we have to sit down with everybody and make our case and listen to the arguments. I am very much hopeful that the regulators and the Government agencies as well will see the merits of what we are doing – as being in the best interest of the customers, jobs and investment. And also, as I keep coming back to, Digicel has been growing in this area; and two big competitors, I think, are good for customers.
You spoke about employment, but what are some of the immediate changes that you are looking at for the Barbados market?
We will be working out how the teams will come together. We have got stores and Flow has got stores. We’ve got different strengths and we will make sure we bring together the best of the best of both companies.
Will this merger affect the rates?
No, I don’t think so. I think if we can make our business as efficient as possible then generally those savings get passed through to our customers.
So what exactly does this move means for the region at this time?
I think it puts Cable & Wireless on the map. It says that Cable & Wireless is here to invest and to stand its ground and stand toe to toe with Digicel, [and] that it is not going to roll over. The Caribbean is our home now.
While Cable & Wireless has many interests around the globe, those are been disposed of now. To me, this puts Cable & Wireless firmly in the heart of the Caribbean; and that is where we want to be. This is our home; we have been in these markets for over 100 years, and this is our home. This is where we like serving our communities and customers. So this is where we stand with pride.
One of the immediate concerns is about a possible lack of competition and that you are here to take over, and then prices will go up while service won’t get any better . . . .
We will have two big strong competitors giving customers a wide choice. It will be a tough battle out there and customers will generally win.
So there should be no concern in that regard?
I would be very happy to have a debate as to why it is good for Barbados and good for our customers. I am happy to engage and put our side of the story forward.
We have received some announcement on the first half report for the CWC group. While you report that the markets are expecting varying economic growth, in Barbados it is somewhat iffy as it relates to economic growth next year. You continue to roll out fibre and invest but what is the confidence level now, especially in the Barbados market, given the economic situation?
We worry about economies. But certainly we have a Government that is pro-business and pro-investment, and that is generally good for the economy. That is why we hope that this transaction is welcomed, because it will mean more investment and more jobs rolling out fibre and employing people, for example.
I might be wrong here, but I sense that the economy is picking up a little bit, with tourism a little bit stronger.
Is there a message that you want to send to your competitor Digicel?
We are here to fight for our customers and to give them better service, better products; and we know we are ready to take on Digicel.
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